Across the United States, consumers are feeling the pressure of economic uncertainties, and many are responding by engaging in what has been dubbed "doom spending." This term refers to the trend where individuals make impulse purchases as a way to cope with feelings of anxiety and despair related to political and economic instability. With rising costs of living and persistent inflation gripping households, particularly among younger generations, spending has taken on new forms as people seek immediate relief.
A recent survey by Intuit Credit Karma revealed alarming statistics: around 60% of Americans express concerns about the current state of the world and economy, with key issues such as the cost of living and inflation driving their anxiety. Many people are experiencing financial stress due to soaring housing prices and stagnant wages, and their worries are compounded by external disruptions like international conflicts.
Interestingly, the survey found younger individuals, particularly Gen Z and millennials, are more likely to turn to doom spending as a coping mechanism. While only 27% of the general population reported engaging in this behavior, the numbers jumped to 37% for Gen Z and 39% for millennials. This behavior reflects their unique position as digital natives constantly affected by online news cycles filled with distressing headlines.
"Doom spending" has its roots connected to the older concept of retail therapy, yet the two are significantly distinct. Retail therapy often serves as short-term relief for specific negative experiences—a stressful job or personal loss. On the other hand, doom spending is fueled by chronic anxiety about the future, creating a perpetual loop of consumption through despair.
The proliferation of smartphones and social media plays a monumental role in this phenomenon. According to the Credit Karma survey, over half of Americans noted they receive bad news every day, with 44% admitting to being "chronically online.” This incessant diet of negativity can motivate individuals to make snap purchases to alleviate their physical and psychological discomfort. More than one-third of those polled believe they would spend less if they managed their screen time effectively.
Financial experts are raising alarms about the ramifications of doom spending. This trend is correlated with rising consumer debt; the Federal Reserve Bank of New York recently noted American credit card debt hitting $1.17 trillion, setting yet another record. Doom spending, often financed through credit cards, is straining financial stability for many consumers.
Despite the underlying anxieties, some argue doom spending may have its benefits—at least for the economy as a whole—if practiced with caution. Anthony Miyazaki, a marketing professor, pointed to this duality stating, "Considering the intensity of the recent political campaigning and all the negative emotions people have been feeling... if doom spending eases those worries, perhaps it’s not as grim as it appears as long as shoppers can afford those credit payments." This contrasts sharply with the potential for doom spending to morph from a momentary comfort to long-term financial hardship.
So, what’s behind these spending habits? A mix of several factors is at play. The impending U.S. elections and associated uncertainties about leadership and governance can exacerbate feelings of unease, leading consumers to rationalize their spending by clutching onto the notion of today’s opportunities waning due to economic flux. Without managing these impulses, the practice risks creating cycles of debt and future financial strain.
Experts suggest several strategies to break the doom spending habit. First and foremost, seeking help for emotional and mental health challenges can go a long way. Whether it’s offline therapy or simply talking to friends, addressing the core anxieties triggering the urge to spend usually helps curb impulsive behaviors.
Another part of the solution is to minimize exposure to the digital world. Aja Evans, financial therapist and author, recommends individuals step away from their screens and engage more with nature to remind themselves of life beyond online stressors. Financial educators also suggest practical measures: removing stored payment information from retail websites can create additional hurdles to snapping up those impulsive purchases, which gives consumers pause to reflect before buying.
During such unpredictable economic times, doom spending continues to provoke rich discussions about psychology, financial health, and consumer behavior amid rising concerns. The impact on the economy and individuals’ financial well-being can’t be underestimated. Retailers may see short-term boosts from consumer spending, but the long-term effects of debt, anxiety, and the follows risks associated with doom spending pose significant challenges. Moving forward, fostering healthy spending habits and addressing emotional and financial stability will be pivotal as the nation navigates these turbulent waters.
