The use of luxury watches, expensive brand bags or sunglasses has increased among today’s youth. This trend is noticeable among those who are in their early twenties and thirties. This generation is known as Generation Z or Gen Z and Millennials. Research is not going on as to why the use of buying luxury goods is increasing among them. Bloomberg published a report on this recently.
24-year-old Nia Holland recently spent $2,500 on a vintage Chanel bag. He used up almost all his savings to buy it. This money could have been spent on other useful activities, saved or invested somewhere. He knew all this. He knowingly spent the money to buy a bag at Chanel.
Nia has no regrets about spending all the time chasing a bag. He does not consider himself irresponsible. Nia argues that she has no formal plans to buy a house or have children. Because achieving these goals is almost impossible for him. So she doesn’t want to miss out on ‘little luxuries’ like buying an expensive bag.
Nia said that the state of the economy is deplorable. Global warming is increasing. Political and social unrest continues around the world. In this situation, this PhD student of the Department of Education and Psychology of the University of Michigan thinks that it is very easy to spend money to fulfill his immediate needs. Such spending by the youth is known as doom spending in economics.
What is Doom Spending?
Bloomberg reports that when economic conditions are bad, people tend to rein in spending. But the opposite scenario is seen among the younger generation. They realized that a dismal future awaits them. It cannot be changed under any circumstances. Because of the stress of education debt, the cost of living continues to rise, and the labor market is changing. In this situation, achieving the goal is becoming difficult day by day. So the youth are spending on their desires without saving money. Focusing on saving or investing. This trend among young people is known as doom spending.
What do the statistics say?
According to recent data from the financial research firm Credit Karma, about 27 percent of Americans doom spending. However, doom spending rates are higher among Millennials and Gen Z. Among Americans born between 1981 and 1996, the doom spending rate is about 43 percent. And among Gen Z, or those born between the late 1990s and 2012, the doom spending rate is about 35 percent.
What the experts are saying
“Doom spending is not a healthy way to live,” says Courtney Alev, consumer financial advisor at Credit Karma. But it’s a way of life, we have to accept that.’
Stephen Wu, professor of economics at Hamilton College in Clinton, New York, said, ‘Such spending by swimmers is consistent with the pace of the ongoing economy. But this is nothing new. When people leave everything to fate and think their financial success is out of their hands. Then they don’t save. Due to the financial crisis of 2007 and 2009 and Corona, such ideas have become more entrenched among people.
Maria Melchor created content for Zen Z. In Tiktok content, he gives financial advice to the youth of this generation. He feels that buying expensive things can be confusing. But when a young person abandons plans to buy a house in the suburbs with the kids, it’s no surprise. So Mariah doesn’t even agree to call Jane Z’s indulgence in luxury goods doom spending. According to him, actually people’s dreams have changed.