Gen Z and millennials are ‘doom spending’

Everywhere you look on social media and in real life, it seems everyone is living la vida loca, purchasing the latest gadgets, and splurging on designer goods and travel. Just recently, I had to remind a friend whose job makes her one of the country’s top-earners that she hasn’t done anything wrong by not being able to afford luxury goods such as the Loewe shades or Le Creuset pots she sees others indulging in. It’s a hard pill to swallow for anyone; watching your age mates and strangers on social media living seemingly large lives while you probably “can’t even afford to buy the home I live in”, like my friend.

Considering these economic hardships — which don’t seem to be getting better with time — one would think people are tightening belts or buying less, but it looks like retail therapy has a new name for millennials and Gen Z, as adulthood continues to dribble us. While my friend is feeling the pressure, you may be, too, and probably engaging in what experts are describing as “doom spending”.

Doom spending is described by Euronews and other outlets as “spending excessive amounts of money on luxury things or experiences, such as travel, to deal with concerns about your own finances or the general economic situation. People may feel like there’s no point in saving, they feel they won’t be able to achieve their financial goals, and may as well live in the moment.”

Millennials and Gen Z are post-boomer generations whose journey into adulthood has been marred by multiple global crises — including several recessions. It appears we are now shopping to fill an endless void of weariness with world affairs and having worse economic prospects than those of generations before us. We’re turning to luxury for it, buying into status symbols to offset our disappointment and perhaps keep up with the Joneses.

Unaffordable housing

Few of us are buying homes and other assets traditionally seen as worthy of investment, and yet we are shopping away on fashion, watches and other such items in ways generations before us never did. Can you blame us? If there’s no chance that I can afford a home, maybe an expensive purse or shoes might give me a temporary sense of control; that I, too, may feel a tiny bit like the adult I’m supposed to be — one that can afford to live, and not just get by.

It’s something that feels increasingly out of reach for many of us daily. The top economic concerns among Americans, according to a study by Qualtrics on behalf of Intuit Credit Karma, include inflation (56%), the cost of living (50%) and unaffordable housing (23%). Of those polled nearly half (48%) say they worry about not having enough money to afford necessities such as food, clothing and rent. The picture is worse in a country such as SA, where youth unemployment was cited as the top concern by 64% of South Africans, according to a “What Worries the World” survey by Ipsos, released in 2023. 

The challenge of unemployment

In an accompanying press release, Ipsos says: “The challenge of unemployment in SA is compounded by the uneven distribution of joblessness across the population. The youth are disproportionately affected, with a staggering 61% of those aged 15-24 being unemployed during the last quarter of 2022. Even more concerning is the fact that 33.6% (or 3.4-million out of 10.2-million) young people in this age group are not in employment, education, or training. This is not only a significant social and economic issue but also a potential source of political instability.”

It adds that nearly “a quarter of Gen Z respondents (23%) say they’re most worried about a lack of high paying jobs, decreasing wages (21%) and general job security (16%)”.

It’s a gloomy picture that confirms that our anxieties are not misplaced. That anxiety is compounded by other factors that make us the perfect candidates for doom spending: social media pressures, as well as the rise of buy-now, pay-later (BNPL) schemes which have taken off in e-commerce specifically, granting those of us who lack restraint, and some who may just be pushed that far for survival, to get into more debt.