Shoppers Turn Doom Scrolling Into Doom Spending
According to Credit Karma’s recent survey, almost all (96 percent) of Americans are concerned about the current state of the economy and to cope, 27 percent say they have started “doom spending.”
Like doom scrolling, the act of doom spending stems from stress and potentially leads to more uncertainty, anxiety and feelings of distress. While doom scrolling leads someone to spend excessive time reading about bad or negative news stories, Credit Karma defines doom spending as “spending money despite concerns about the economy and foreign affairs.”
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“Much like doom scrolling, we’re seeing people mindlessly shop to soothe concerns about the economy and foreign affairs, which could take a toll on their financial well-being,” said Courtney Alev, Credit Karma’s consumer financial advocate. “I think we are going to see many consumers overspend this holiday season as a way to cope with their stress. Doom spending has the potential to negatively affect consumers’ debt levels and their ability to save, adding to the growing financial instability for many people right now.”
While emotional spending isn’t new, Credit Karma’s survey shows that for many (64 percent) doom spending has accelerated as American’s concerns about the economy continue to rise.
Credit Karma’s survey revealed that the phenomenon of doom spending is most common among younger generations, representing 35 percent of Gen Z and 43 percent of Millennials. More than a quarter (27 percent) of consumers said they are spending more money now than they were six months ago — even higher for Gen Z (33 percent) and Millennials (34 percent) who also report a rise in debt.
Looking at consumers with debt (74 percent), a quarter predict they currently hold more than $10,000 in debt. Compared to previous data, Credit Karma’s report has found that many Americans are in a worse financial situation compared to six months ago, with 42 percent of survey respondents reporting struggles to afford enough food for themselves and/or their household and 56 percent revealing the need to live paycheck to paycheck.
Doom spending, said Credit Karma’s report, will likely impact Americans’ savings rate, pointing to the 47 percent of Americans who report a lower amount of savings. Almost a quarter of survey respondents also said they are not optimistic about the economy in 2024.
Younger generations specifically reported concern about how the current economy will impact job prospects and earning potential. Twenty-three percent of Gen Z respondents said they are most worried about a lack of high-paying jobs (23 percent), decreasing wages (21 percent) and general job security (16 percent). Overall, Gen Z and Millennials were found to be the most likely to report feelings of financial anxiety (71 percent).
Given their outlook on the future state of finances, Alev told WWD that she predicts consumers will be doom spending well past the holidays and into the new year. Through her role at Credit Karma as an advocate for consumer finance, she advises mindfulness when it comes to spending especially “during tempting moments like the holidays” to avoid increasing debt as many will be left with buyer’s remorse.
For More WWD Business News:
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