Rise of the doom-spenders

Rise of the doom-spenders

Worried about student loans, affording a house, or even retiring one day? How about forgetting the future and spending all your money now? This is the new mindset of Gen Z doom-spenders who are spending their way out of the cost of living crisis.


Let’s face it: we’ve all been a doom spender at some point! It’s simply retail therapy with a social media twist. According to data from Credit Karma, 43% of millennials and 35% of Gen Z doom spend and indulge in impulse buys to self-soothe and feel better about life’s stressors. Want those Adidas Sambas, that must-have Zara bag, or expensive Taylor Swift tickets, well, you can have it all now!


Fuelled by Instagram and TikTok, doom spending has become the norm, so much so that a range of social posts now discuss how jaded Gen Z feel about their financial futures and how buying makes them feel more in control of their money.


In one top viral TikTok video, which currently has 1,7 million views, creator Maria Melchor (@firstgenliving) explains why Gen Z are doom spending. Says Maria, “When older people ask me how young people are affording nice things that they wouldn’t even buy for themselves,” Melchor said. “I tell them it’s because we can’t afford anything else. When houses are a million dollars plus, we’re gonna relinquish any lingering delusions about homeownership.”


With a high cost of living, a looming recession and student loan debt now covering a 40-year span, it’s easy to see why many Gen Z feel outside factors determine their future financial success, 


What is Gen Z doom-buying 


As for what doom=spenders are buying, fashion buys dominate, with around 75% of their purchases being in this sector, compared to 65% of millennials. Social media also has a direct role with 49% of Gen Z purchasing more clothing due to what they see on social, and about a third purchasing more beauty, skincare (34%) and technology (31%). 


The hashtag #TikTokMadeMeBuyIt gives an even clearer insight into doom spending trends with luxury items like Skims shapewear, Dyson Air Wrap, Nike and Adidas trainers, Korean skincare and even Fendi Baguette bags dominating posts.


Money is also being spent in online marketplaces where perceived bargains often make Gen Z spend more. Our data shows that last year, kids and teens spent £635,350 at Depop, spending an average of £58.76 in 2022, which is a 78% increase on the previous year. £761,385 was spent at Vinted: an average of £45.22 per shopper – and a 24% increase in 2021. 


And let’s not forget food. From Insta-brunches to TikTok go-tos like Korean corndogs, viral doughnuts, and Japanese souffle pancakes, all of it adds up. What’s more, regular splurges on delivery apps are also on the rise. Our data shows kids aged 6-18 spent a grand total of £7.85 million on food delivery apps: Just Eat, UberEats, and Deliveroo. On Deliveroo, there was an average transaction of £18.45, followed by Just Eat at £16.88 and UberEats at £16.33. 

The downside of doom spending


Spending to feel better has, of course, huge downsides. For starters, it traps young people in an unhealthy cycle of buying in search of instant gratification. As a result, many sleepwalk into expensive purchases and Buy-Now-Pay-Later (BNPL) debt. 


New research* from Barclays Partner Finance suggests that Gen Z consumers are disproportionately impacted by the pitfalls of BNPL, with nearly a third (29%) concerned about their ability to pay back what they’ve borrowed.


Louise Hill, Co-founder and CEO of GoHenry, advises, “All kids and teens need to understand how money and spending is linked to their self-esteem. You can’t buy a lifestyle, and you won’t feel better about the future by spending too much now. Instead, teach kids that a strong financial future is within their reach by helping them become financially literate. This way, they will have the confidence to save for a range of goals, say no to peer pressure, and find better ways to cope when they feel down.”


Not all doom and gloom


The good news is it’s not all doom and gloom. While Gen Z are doom spending, they do have their own plans to achieve financial freedom. Our data shows that more than four in ten kids aged 6-18 (42%) say that recent events like the Covid pandemic and the cost of living crisis have made them more likely to start saving early, with this age group saving 145% more than they did last year. 


However, while savings are on the up, what will really help Gen Z navigate trends like doom spending is better financial education. With the current lack of financial education in schools, young people are missing out on the chance to master money skills that will help them navigate the world of spending.


What's more, with nearly half (49%) of UK kids and teens not knowing what 'interest' is and what it means for their money, there's a good chance this generation will also miss out on opportunities to make their money work harder now and in adulthood. Something we're committed to pushing the government to address before it's too late.



Written by Anita Naik Published Feb 22, 2024 ● 3 mins