Doom Spending Unwrapped: Gen Z's Costly Escape From Future Fears

A recent study reveals that Gen Z is turning to 'Doom Spending' as a coping mechanism for stress and anxiety triggered by concerns about their future. The study, conducted by researchers at Simon-Kucher shed light on a trend characterized by impulsive and often irresponsible financial decisions driven by the desire for instant gratification.

According to the study, younger consumers, regardless of their financial footing, are increasingly entering the luxury shopping stratosphere to appease news fatigue. But reality hits hard when bills start to pile up.

The study compares 'Doom Spending' with 'Doom Scrolling,' a behavior proven to cause significant mental fatigue, as individuals get trapped in a loop of constantly seeking instant gratification or material possessions.

The survey noted that Gen Z holiday shoppers are splurging big on gifts, spending a staggering 21% more than last year's figures. Interestingly, Millennials are estimated to spend 16% more than prior year, Baby Boomers plan to increase their holiday spending by 6%, while Gen Xers expect to spend 5% more.

Gen Z, according to the study, will spend more on beauty, furniture, fashion accessories, pets, books/magazines as well as trips and experiences during this holiday season.

On the other hand, Millennials are likely to splurge on all other gift categories except gift cards.
Baby Boomers lead spending on gift cards only.

Shikha Jain, a Simon-Kucher-linked researcher, said that the habit is anything but ordinary. Jain told USA Today that both Gen Z and Millennials don't mind reaching their financial breaking point to buy stuff they have seen on social media. In doing so, they are seemingly surpassing the spending capacity of the older generations, with the go-to paying methods being credit/debit cards and buy now/pay later agreements.

Jain said Doom Spending is a newer trend and common among those who tend to spend more time on their phones. "It involves impetuous purchases that offer this short-term delight but can cause long-term financial strain," she said. "It's more than just impulse buys or retail therapy."

"All of these negative events and constant fear and literally doom and gloom that younger consumers are exposed to – geopolitics, macro-environment, local and social news – they just grew up in a very non-sheltered life compared to other generations," Jain said of Gen Z. "They don't have many ways to self-soothe or cope."