Doom spending – why Gen Zs and millennials are emptying their savings accounts
Younger generations are spending more and more on luxury goods these days rather than saving for long-term goals.
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For older generations, the dream of home ownership, two-and-a-half kids and that white picket fence was the vibe. But now, with rising home prices, a cost of living crisis, wars and climate change – the world we’re living in seems a lot gloomier than it used to. So, that’s why Gen Z and millennials are turning to something being called “doom spending.”
Younger generations are spending more and more on luxury goods these days rather than saving for long-term goals like buying property or a retirement nest egg. It could take years to save up a down payment on a home – but that Birkin bag is a treat you can have today. Why work towards a goal that seems like it’s slipping further and further out of reach?
Well, that’s at least how 27-year-old TikToker Maria Melchor framed it. Melchor is a content creator who focuses on financial education for Gen Zs, and she’s made a TikTok video on this trend that’s resonated a lot with people – it’s gotten more than 1.8 million views. “We can’t afford anything else,” Melchor says at the start of the video.
“Homeownership or starting a family is so out of reach that we’re using that down payment or kid money on whatever it is we can afford that will bring us a semblance of the kind of adulthood we were promised,” Melchor explains.
@firstgenliving #zillennial #dink ♬ original sound - Maria | FirstGenLiving
It seems younger generations are consequently “doom spending” on luxury goods and instant gratification to make themselves feel better about the fact that they’re probably going to be renting for the rest of their lives. In 2022, Gen Zs and millennials accounted “for the entire growth of the luxury market,” according to management consultancy firm Bain & Company, and are predicted to represent 70% of luxury spending by 2025.
Personal finance company Credit Karma has found that 27% of people in the US admit to doom spending to cope with their worries about the economy and global politics, with the rates being even higher among millennials and Gen Z, at 43% and 35%, respectively.
“It’s a way to cope – albeit not the healthiest one,” said Courtney Alev, a consumer financial advocate at Credit Karma.
With nearly half of young people still living at home, a lot of them aren’t thinking about a 10-year plan and instead want to enjoy their lives now.
“I’m just going to live for the moment, spend the money I have, and enjoy the things that I want right now – even if I have to live paycheck to paycheck,” said Anette Suveges, a 27-year-old account executive working at Harpswood PR, to Fortune.
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