Young People Are ‘Doom Spending’ on Luxury Goods. Here’s Why.
In the face of economic turbulence and political strife, why not enjoy the finer things in life, like a Chanel bag or fancy skin-care products?
That’s what millennials and Gen Z seem to think, at least. More than ever, younger generations are spending their savings on luxury goods, Bloomberg reported on Wednesday. Known as “doom spending,” the act is practiced by some 43 percent of millennials and 35 percent of Gen Z, according to data from the personal finance company Credit Karma. That’s a higher proportion than the overall 27 percent of Americans who spend more to deal with their qualms about the economy and foreign affairs.
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“It’s a way to cope—albeit not the healthiest one,” Courtney Alev, a consumer financial advocate at Credit Karma, told the news outlet.
While historically, trends show that when economic times get tough, people save more, younger generations are flipping that on its head. With a high cost of living, hefty student-loan debt, and a tough labor market, many people don’t think they’ll ever be able to buy property, have kids, or retire with a loaded bank account. Since that all feels out of reach, the money that may have been put toward those traditional markers of adulthood is simply being spent now.
Adrian Sega, a 26-year-old personal care assistant in New York, told Bloomberg that he spent the last of his emergency savings on a knockoff of the Burberry tote featured in Succession. His funds have also gone toward skin-care items, a pea coat, and an imitation Birkin bag—all things that he called “needed for the moment.” And Nia Holland, a 24-year-old grad student, drained her savings to buy a vintage Chanel bag.
“The economy sucks, there’s global warming, there’s constant political and social unrest globally,” Holland told Bloomberg. “It’s just easier to spend money on things that will bring you immediate fulfillment.”
The trend isn’t a new one, with the Hamilton College economics professor Stephen Wu publishing research about doom spending all the way back in 2004. He found that when people feel like luck or other outside factors determine their financial success, they’re less likely to save for the future. And now, after the pandemic and the Great Recession, that sort of fatalism has become even more common, he told Bloomberg.
If you feel like the world is ending, at least you could go out with a fancy bag on your shoulder.
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