- Nearly all Americans are concerned about the current state of the economy.
- Still, many continue to spend more and save less.
- “Doom spending” may be one way to cope with stress as economic fears mount, however, it comes at the expense of your financial well-being.
Consumer spending has remained remarkably resilient in the face of some stiff economic headwinds.
Nearly all Americans, 96%, are concerned about the current state of the economy, according to a recent report by Intuit Credit Karma.
Still, more than a quarter are “doom spending,” or spending money despite economic and geopolitical concerns, the report found.
Even as inflation and high interest rates have squeezed budgets, a record 200 million shoppers turned out between Black Friday and Cyber Monday, according to the National Retail Federation. This season, holiday spending is expected to reach record levels, totaling up to $966.6 billion, the NRF projects.
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“Much like doom scrolling, we’re seeing people mindlessly shop to soothe concerns about the economy and foreign affairs, which could take a toll on their financial wellbeing,” said Courtney Alev, Credit Karma’s consumer financial advocate.
Even as credit card debt tops $1 trillion, Gen Z and millennials are particularly susceptible to this mindset, other reports show.
Rather than cut expenses, 73% of Gen Zers say they would rather live in the moment, a recent Prosperity Index study by Intuit found.
High inflation has made it particularly hard for those just starting out. More than half, or 53%, of Gen Zers said the increased cost of living is a barrier to their financial success, according to a separate survey from Bank of America.
“Younger adults feel discouraged,” said Ted Rossman, senior industry analyst at Bankrate.
However, “one thing that young adults have working for them is the advantage of time,” he added. “Every dollar you set aside will compound.” Gen Z workers are the biggest cohort of nonsavers, Bankrate also found.
At the very least, strike a balance, Rossman advised. Automate a portion of your income toward savings and build some fun into the budget, he said. “At least then you are not paying 20% credit card interest.”
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