Young Adults Engaging in ‘Doom Spending’ Amid Economic Uncertainty
A growing number of young people are indulging in luxury items like travel and designer clothes instead of saving, a behavior dubbed "doom spending" on social media. According to Psychology Today, doom spending occurs when individuals shop mindlessly to self-soothe because they feel pessimistic about the economy and their future. Ylva Baeckström, a senior finance lecturer at King’s Business School, describes the trend as both "unhealthy and fatalistic" and explains that chronic exposure to bad news online exacerbates feelings of impending doom, leading to poor financial habits.
An Intuit Credit Karma survey conducted in November 2023 reported that 96% of Americans are concerned about the state of the economy, with over a quarter resorting to doom spending to manage stress. This phenomenon is not limited to the US; Stefania Troncoso Fernández, a 28-year-old publicist from Colombia, admitted to having been a doom spender, attributing it to rampant inflation and political instability, which make saving seem irrational.
Global financial insecurity is widespread, with nearly 43% of adults feeling worse off than their parents, according to a CNBC International Your Money Financial Security Survey. Baeckström warns that doom spending offers an illusion of control in a turbulent world, potentially compromising future financial stability.
Some, like Daivik Goel from Silicon Valley, fall into doom spending due to dissatisfaction and peer pressure but find relief by discovering fulfilling work. Financial expert Baeckström advises understanding one’s relationship with money to combat this issue, noting that financial attitudes are often shaped in childhood. Strategies to mitigate doom spending include making transactions more deliberate, such as shopping in-person and using cash, as suggested by Samantha Rosenberg, co-founder of Belong.
This growing trend underscores the need for better financial literacy and proactive financial management to break the cycle of unhealthy spending.
Original Story https://www.cnbc.com/2024/09/23/young-people-are-doom-spending-heres-what-it-is-and-how-to-stop-it.html
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