Does ‘doomspending’ reflect a rational response to a broken economy?
An increasing number of young Americans are spending money on discretionary items — takeout, rideshares, vacations financed through buy-now-pay-later services — with little regard for long-term savings, a behavior that analysts have termed “doomspending.” The phenomenon was first measured in a fall 2024 survey by Credit Karma, a consumer fintech company, which reported that 27% of all U.S. adults said they spend frivolously to cope with stress. Among Gen Z respondents, the figure rose to 37%, and among millennials it reached 39%.
Sean Monahan, a Los Angeles-based writer and trend forecaster who co-founded the trend forecasting group K-Hole and publishes the newsletter 8Ball, examined the trend in a June 4 opinion piece in The Guardian. Monahan described doomspending as “spending frivolously with no concern for future financial consequences” and argued it reflects a deeper shift in how young adults view the economy.
“Save when you’re young and spend when you’re old doesn’t make sense in an inflationary economy,” Monahan wrote. He cited data from the Truflation index showing the U.S. dollar has lost 30% of its value since the start of the COVID-19 pandemic, 60% since the 1990s and 88% since the 1970s. The dollar’s decline has been obscured by falling prices for consumer goods like clothing and electronics, Monahan noted, but “positional goods” — housing, healthcare and education — have become dramatically more expensive relative to wages.
The median U.S. home price was $403,200 as of the latest data, according to the Federal Reserve Bank of St. Louis (FRED), a figure that underscores the housing affordability challenges Monahan described.
“Doomspending” entered the lexicon amid a broader trend of doom-prefixed terms describing online malaise — doomscrolling, doomposting, doomsplaining. Monahan traced the discourse to earlier generational blame games. He recalled the 2010s criticism of millennials for spending on avocado toast, which some commentators argued was preventing them from buying homes. More recently, Canadian businessman Kevin O’Leary went viral after castigating Gen Z for buying “$28 lunches.”
Monahan argued that the criticism stems from a belief that “financial habits are moral habits” and that the economy rewards those who play by the rules. However, he wrote, young people “just don’t believe that’s true any more.” Many now view the economy as a “casino” where some get lucky but most lose, or believe that large tech firms are “self-dealing parasites” extracting value from the real economy.
The generational gap between baby boomers — who came of age in the postwar prosperity — and their children and grandchildren echoes the original “generation gap” that separated boomers from their own frugal parents, the Silent Generation, who were scarred by the Great Depression. Today’s young adults have watched the prices of clothing, electronics and homewares decline while housing costs exploded, Monahan wrote, making the rational decision to “spend today, rather than save for tomorrow.”
“Spend today because there won’t be a tomorrow is a self-fulfilling prophecy,” Monahan concluded. “The only way to stop it is to make people believe that an average person of average abilities can wake up every day, play by the rules, and expect to lead a fulfilling, if uneventful, life.”