“We Can’t Afford Anything Else”: Woman Explains Why Young People Are Buying Lavish Items
While historically people often save more when times get tough, current younger generations are flipping that around.
With a high cost of living, hefty student loan debt, and a tough labor market, many no longer believe they will ever afford a home or kids, so they are “doom spending” instead.
It’s defined as an act of spending money to cope with stress despite concerns about the economy and foreign affairs
According to a recent study conducted by Qualtrics on behalf of Intuit Credit Karma, more than a quarter of Americans (27%) engage in it, including 35% of Gen Z and 43% of millennials.
To give everyone interested a better understanding of the phenomenon, Maria Melchor, a NYC-based financial content creator, made a comprehensive video about it.
More info: FirstGenLiving.com | Instagram | TikTok
Personal finance expert and content creator Maria Melchor took it upon herself to explain the concept of “doom spending” to the internet
Image credits: firstgenliving
“When older people ask me how young people are affording nice things that they wouldn’t even buy for themselves, I tell them it’s because we can’t afford anything else. Homeownership or starting a family is so out of reach that we’re using that down payment or kid money on whatever it is we can afford.”
Image credits: firstgenliving
“That’ll bring us a semblance of the kind of adulthood we were promised when houses are a million dollars plus, and an older couple will likely outbid us anyway. We’re going to relinquish any lingering delusions about homeownership, and instead use that money to give our dogs the most enriched puppyhood they can have.”
Image credits: firstgenliving
Experts believe this practice is harming people’s well-being in the long run
The aforementioned Credit Karma study was conducted in November 2023, and it also discovered that in the six months leading up to it, half of Americans’ financial situation had worsened, with 42% reportedly struggling to afford enough food for themselves and/or their household, and another 56% living paycheck to paycheck.
During the same period, nearly one-third (32%) of Americans’ debt level had increased, mostly among millennials (38%) and Gen X (35%). Of those with debt, a quarter estimated they held more than $10,000 in debt – a significant amount, especially amid such high interest rates.
“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 well-being,” said Courtney Alev, consumer financial advocate at Credit Karma.
Alev believes this is not a good practice. To keep yourself in check, she suggests doing an assessment of your finances to understand how much money you have coming in and out each month, as well as how much debt you owe. “This will help you make a plan for how you’re going to spend your money moving forward.”
“To get in the habit of better spending, consider using cash instead of cards until you get your spending in check. That way, you can limit your chances of overspending. Also, if your card information is stored online, you might consider deleting stored card information through your browser to make shopping online less frictionless,” Alev added.
Image credits: Karolina Grabowska (not the actual photo)
While doom spending may capture the economic zeitgeist of today, the habit isn’t new. Stephen Wu, an economics professor at Hamilton College in Clinton, New York, published a paper in 2004, explaining some people who feel luck and other outside factors play a significant role in their financial success are less likely to save.
He thinks that feelings of fatalism and counterintuitive spending habits have become more common in recent years, particularly after the pandemic and Great Recession. That’s when people began to realize that “a large part of their successes and failures were out of their control,” Wu said.
Melchor’s mini video lesson has since gone viral
@firstgenliving #zillennial #dink ♬ original sound – Maria | FirstGenLiving
And it has ignited quite a heated discussion
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“Denying yourself all pleasures won’t lift you out of poverty but it will make you want to kill yourself” - the most succinct explanation of this topic that I have ever seen.
Yup. Been there, done that. Will never say, why are they wasting their money on xxxx, because if you will never save enough to make a difference, there's no point saving
Load More Replies...
I read that sales of frivolous items like lipstick actually went up in the Depression, rather than down, because people couldn’t afford the stuff they actually wanted, but they could afford lipstick and it was better than nothing. This isn’t new.
I think it depends where you live and the type of lifestyle you want to live. I live in the Midwest and there are affordable houses here. I own my own home, however if I lived on the east or west coast, I'd definitely not be able to afford even a studio apartment.
I found a fixer upper for 56k(on Zillow like at most 2 years ago). Like you can live in it, but it's definitely needing repairs. Not even a trailer/mobile home nor a modular. Friends, skills, tools and YouTube helped me transform my junk first house to pay for the next nice one.
Load More Replies...
Oh I feel that! I wasted a lot of money on small things when I was broke because I couldn't afford even basic needs, just to feel something. And it was a constant down spiral. It's not like I paid an actual high amount, just 100-150 bucks for 'frivolities' I couldn't really afford, just to feel human. A nice pin for my DIY purse, since I couldn't afford a bought one I made one from old clothes and the pins made it feel less embarrassing and more artsy. A set of scented candles, pretty knobs for my second hand cupboards, a pretty rug, water chalices, in game packages, pizza delivery at least once a week... People couldn't understand why but it was escapism. An attempt to feel a bit better about a horrible situation. But now that I have a stable income with some extra spending money I buy nothing of that anymore and can put 500 in my savings every month. There's no nagging feeling of dread anymore that I have to silence by making me feel that I'm still alive by spending money.
We saw this in minorities through the 1960's and maybe 70's. Those that had money had big fancy cars and tiny houses in a bad neighborhood. Why? They could not buy houses in a better neighborhood because of segregation. The car dealers were happy to sell to anyone with money. As a boomer from the end of the boomer years I am sad that my children will have it harder than their parents or grandparents, and wish I were wealthy rather than lower middle class. That way I could help them more.
I see that people are investing in themselves, such as nails, beauty treatments, tattoos rather than the golden hoop of the property ladder or investing in their long term future as that is out of reach. It feels like this is their opportunity to express themselves and be empowered but it also feels like another marketplace ploy and 'keeping up with the Jones's' in another way.
Beauty treatments can definitely be a money trap, especially things like gel nails and hair dye done at a salon. They just keep growing out and have to be redone! My top tip is to never start
Load More Replies...
I'm a Boomer and have and have had all the things this post says later generations can't afford. Having raised three children to adulthood, I've got to agree that the post is correct for the most part and I think I know the reason why. Ever since at least 1913 the US government has enlarged itself by consuming ever larger chunks of America's productivity until today it has a debt growing beyond $34 trillion, requiring interest payments that consume even more of America's productivity. Working for no return, just to pay the interest plus indebtedness is the definition of slavery and the slaves (taxpayers) may have instinctively realized this and have gone on strike. Yes, they are refusing to work as hard as previous generations and why should they? Work won't get them anywhere. Promising to "tax the rich" won't help anything because anyone with enough wealth to make a difference already knows how to escape taxation. The only solution I can see is starving government.
Definitely. College is just adult day care with extraordinary costs caused by federal loan program which everyone hates and is very much a point of complaint... Which is a government program. "Taxing the rich" doesn't help because the government will just figure out how to overextend more... The rich get taxed at 35% and Biden wants it to be 25%(which is contradictory to what he says about them not paying their fair share) but also they want to tax the gains on a house you own... Every year... And the positive accrual on an account... Every year. The tax system should be set up in a simpler fashion to make it better and easier, while also making it more noticable when someone is trying to defraud. But again, the government makes it so complex so senatorscan benefit from the complexity and get massively rich while not paying their due taxes while trying to sic the IRS on those who create jobs for people that bring in the tax dollars to their failed and hemorrhaging programs.
Load More Replies...
Didn't we have this discussion the last time someone had avocado toast instead of saving for a house, or when person from wealthy parents tried saying they worked hard for their millions?
Avocado toast is actually an economical food if you make it yourself. Or at least if you live close to the avocados. Plus now eggs are more reasonably priced again so more protein.
Load More Replies...
Here's why houses are so expensive. After the Mortgage Crash, banks (with all their new money from govt) started investing in actual property. They buy up property, wait for the prices to go up, sell. ONLY, suddenly they had billions in bailout money. This allowed them to buy more and wait longer. So what they did was buy up huge numbers of houses and apartments creating an artificial shortage (like the diamond companies do with the diamond market). Only, now they're playing musical chairs with it. The prices keep going up and up and up, and they've all got stars in their eyes for all the billions they're about to make if they sell at the right time. I've seen little shifts, little panics, where someone starts to sell, but the others jump in and buy it up before it the real collapse begins. It's completely unsustainable, and once the collapse begins and all the panic selling starts, it'll make the last financial housing collapse look insignificant.
I say all this as a mid-40s professional with a home, wife and kids who somehow managed to not be burdened in the ways those younger than I: this is how poor people think about money which is sad and depressing. And nobody wants to do anything about it because capitalism is awesome and must be defended no matter the cost, I guess?
Sounds like me. I work two jobs and have a masters degree in biology but I can't afford a house or an apartment. Even the most run down dangerous apartment buildings in my area require a base salary that is more than I make. Landlords won't even talk to me until I'm making that salary. I'm living with my parents on a chore-for-rent basis and after 20+ years of saving and trying to get my own place, I've given up. The market keeps going up beyond my raises and savings. But my car is paid off, I was able to buy new brakes last month without going into debt, and my cats all went from homeless strays to living a life of luxury, so it's not all bad.
I would say that I understand where they're at but they think that every person in every generation before them had everything they needed handed to them so they wouldn't believe me. So I'll continue down the path of caring less and less about their plight with each post like this that I see.
F**king right wing boomers have annihilated the American "dream" for the next 75+ years thats all it'll be a delusional fantasy
I don't spend beyond my means but there's little point in saving for me. My ability to work can be limited by my disability/discrimination but if I have too many assets I'd be ineligible for financial support. Not all support is means tested in the UK, but it is for all the stuff I'm eligible for.
I've been scrimping and saving into a LISA for 3 years and even with the 25% government bonus I'm only at £8000. That's not a house deposit anywhere in the UK. It makes me depressed to think how long it would actually take, so I understand why many don't bother
Load More Replies...
There was a time 'putting off buying an apple today, so you can buy 10 apples in two weeks' made sense. Now, the cost of buying '10 apples' is rising faster than people can save in 'two weeks', not to mention that by the time they CAN be afforded those '10 apples' will have been both reduced in size and enjoyment value.
Load More Replies...
Even if they do without and scrape together a down payment, if they can semi afford the mortgage payment, they have an insurance payment and property tax that will push them over the edge.
My younger family members all complain they can't save enough to buy a house, but I see the biggest TV's with all the cable channels, fingernails and hair salon appointments, shopping at expensive malls, not Gabe's or big lots, eating out, door dash instead of meal planning, only work one job, always expecting older family members to finance their lifestyle, 2 new cars when only one person works...I mean, come-on!! The excuses never stop, and every single generation has dealt with economic depression, wars, incompetent president, etc...live how you want but don't come whining to me about how hard it is when my car is 21 years old with 170k miles on it. And I will drive it as long as possible to keep away from car payments.
I do know that many of today's younger generations are expecting and waiting for inheritances that include money that they are not saving themselves and houses they thus cannot expect to afford on their own. I am leaving my daughter's expected and counted on inheritance to my cats. I refuse to watch her spend all her money on lavish and wasteful things that I could never have afforded. And, no, I did not inherit my supposedly wonderful lifestyle and home from my parents.
I do know that many of today's younger generations are expecting and waiting for inheritances that include money that they are not saving themselves and houses they cannot expect to afford on their own. I am leaving my daughter's expected and counted on inheritance to my cats. I refuse to watch her spend all her money on lavish and wasteful things that I could never have afforded.
What happens when they reach retirement age? They'll have nothing, their possessions will be worth pennies on the dollar for resale, some won't even be worth anything. They'll all be living on the streets with designer shopping bags holding what little they have left. When others are living comfortably, they'll be scrounging and lining up at the soup kitchen. Sure, they think they're being "edgy" and "cool" now, but when they're old and have no earning years left, they'll be even further left behind. I wish they'd rethink this mindset and save SOMETHING for when their parents are dead and no longer bailing them out.
I doubt anyone is overspending because they are concerned about foreign affairs. Also, kids don't really cost that much. Turns out that you don't actually have to buy them the most expensive version of everything.
"Kids don't really cost that much". Sounds like something that someone who's never had kids would say. Kids aren't expensive because we're buying them Gucci backpacks for school. It's more of a death from a thousand paper cuts kind of thing.
Load More Replies...
These young people complaining that homes are a million dollars so why save? That's just a way to rationalise their irresponsible spending habits. My first home was a barn that I renovated, then sold for an apartment I renovated and now I'm in a 1000 square foot home that needs to be renovated. Getting an affordable home is just something younger people don't want to work for anymore. They'd rather spend all their money on pleasure items and blame "boomers "for everything. When major corporations own all the rental property and keep jacking up the rent, just remember that you could have been home owners if you looked at more affordable homes that you could afford, improve, flip and move upwards.
Depends on where you live. In Orange County, CA, U.S.A., I looked at studio condos in non fancy complexes that asking was over 300k. The hoa was over $400 per month. I know of a small 2 bedroom 1 bath house, no AC, that needs a total replumb, new floors, new walls, mold abatement (pipes burst, nothing done to fix it other than turning off water for several years) probably needs electrical work and much more that could easily sell for over 500k. When you compare wages to housing costs, it is impossible for many to buy, not even a hunk of land without a building on it.
Load More Replies... Thanks I'll edit out my thoughts, they are not valid because typos and dyslexia.
“Denying yourself all pleasures won’t lift you out of poverty but it will make you want to kill yourself” - the most succinct explanation of this topic that I have ever seen.
Yup. Been there, done that. Will never say, why are they wasting their money on xxxx, because if you will never save enough to make a difference, there's no point saving
Load More Replies... I read that sales of frivolous items like lipstick actually went up in the Depression, rather than down, because people couldn’t afford the stuff they actually wanted, but they could afford lipstick and it was better than nothing. This isn’t new.
I think it depends where you live and the type of lifestyle you want to live. I live in the Midwest and there are affordable houses here. I own my own home, however if I lived on the east or west coast, I'd definitely not be able to afford even a studio apartment.
I found a fixer upper for 56k(on Zillow like at most 2 years ago). Like you can live in it, but it's definitely needing repairs. Not even a trailer/mobile home nor a modular. Friends, skills, tools and YouTube helped me transform my junk first house to pay for the next nice one.
Load More Replies... Oh I feel that! I wasted a lot of money on small things when I was broke because I couldn't afford even basic needs, just to feel something. And it was a constant down spiral. It's not like I paid an actual high amount, just 100-150 bucks for 'frivolities' I couldn't really afford, just to feel human. A nice pin for my DIY purse, since I couldn't afford a bought one I made one from old clothes and the pins made it feel less embarrassing and more artsy. A set of scented candles, pretty knobs for my second hand cupboards, a pretty rug, water chalices, in game packages, pizza delivery at least once a week... People couldn't understand why but it was escapism. An attempt to feel a bit better about a horrible situation. But now that I have a stable income with some extra spending money I buy nothing of that anymore and can put 500 in my savings every month. There's no nagging feeling of dread anymore that I have to silence by making me feel that I'm still alive by spending money.
We saw this in minorities through the 1960's and maybe 70's. Those that had money had big fancy cars and tiny houses in a bad neighborhood. Why? They could not buy houses in a better neighborhood because of segregation. The car dealers were happy to sell to anyone with money. As a boomer from the end of the boomer years I am sad that my children will have it harder than their parents or grandparents, and wish I were wealthy rather than lower middle class. That way I could help them more.
I see that people are investing in themselves, such as nails, beauty treatments, tattoos rather than the golden hoop of the property ladder or investing in their long term future as that is out of reach. It feels like this is their opportunity to express themselves and be empowered but it also feels like another marketplace ploy and 'keeping up with the Jones's' in another way.
Beauty treatments can definitely be a money trap, especially things like gel nails and hair dye done at a salon. They just keep growing out and have to be redone! My top tip is to never start
Load More Replies... I'm a Boomer and have and have had all the things this post says later generations can't afford. Having raised three children to adulthood, I've got to agree that the post is correct for the most part and I think I know the reason why. Ever since at least 1913 the US government has enlarged itself by consuming ever larger chunks of America's productivity until today it has a debt growing beyond $34 trillion, requiring interest payments that consume even more of America's productivity. Working for no return, just to pay the interest plus indebtedness is the definition of slavery and the slaves (taxpayers) may have instinctively realized this and have gone on strike. Yes, they are refusing to work as hard as previous generations and why should they? Work won't get them anywhere. Promising to "tax the rich" won't help anything because anyone with enough wealth to make a difference already knows how to escape taxation. The only solution I can see is starving government.
Definitely. College is just adult day care with extraordinary costs caused by federal loan program which everyone hates and is very much a point of complaint... Which is a government program. "Taxing the rich" doesn't help because the government will just figure out how to overextend more... The rich get taxed at 35% and Biden wants it to be 25%(which is contradictory to what he says about them not paying their fair share) but also they want to tax the gains on a house you own... Every year... And the positive accrual on an account... Every year. The tax system should be set up in a simpler fashion to make it better and easier, while also making it more noticable when someone is trying to defraud. But again, the government makes it so complex so senatorscan benefit from the complexity and get massively rich while not paying their due taxes while trying to sic the IRS on those who create jobs for people that bring in the tax dollars to their failed and hemorrhaging programs.
Load More Replies... Didn't we have this discussion the last time someone had avocado toast instead of saving for a house, or when person from wealthy parents tried saying they worked hard for their millions?
Avocado toast is actually an economical food if you make it yourself. Or at least if you live close to the avocados. Plus now eggs are more reasonably priced again so more protein.
Load More Replies... Here's why houses are so expensive. After the Mortgage Crash, banks (with all their new money from govt) started investing in actual property. They buy up property, wait for the prices to go up, sell. ONLY, suddenly they had billions in bailout money. This allowed them to buy more and wait longer. So what they did was buy up huge numbers of houses and apartments creating an artificial shortage (like the diamond companies do with the diamond market). Only, now they're playing musical chairs with it. The prices keep going up and up and up, and they've all got stars in their eyes for all the billions they're about to make if they sell at the right time. I've seen little shifts, little panics, where someone starts to sell, but the others jump in and buy it up before it the real collapse begins. It's completely unsustainable, and once the collapse begins and all the panic selling starts, it'll make the last financial housing collapse look insignificant.
I say all this as a mid-40s professional with a home, wife and kids who somehow managed to not be burdened in the ways those younger than I: this is how poor people think about money which is sad and depressing. And nobody wants to do anything about it because capitalism is awesome and must be defended no matter the cost, I guess?
Sounds like me. I work two jobs and have a masters degree in biology but I can't afford a house or an apartment. Even the most run down dangerous apartment buildings in my area require a base salary that is more than I make. Landlords won't even talk to me until I'm making that salary. I'm living with my parents on a chore-for-rent basis and after 20+ years of saving and trying to get my own place, I've given up. The market keeps going up beyond my raises and savings. But my car is paid off, I was able to buy new brakes last month without going into debt, and my cats all went from homeless strays to living a life of luxury, so it's not all bad.
I would say that I understand where they're at but they think that every person in every generation before them had everything they needed handed to them so they wouldn't believe me. So I'll continue down the path of caring less and less about their plight with each post like this that I see.
F**king right wing boomers have annihilated the American "dream" for the next 75+ years thats all it'll be a delusional fantasy
I don't spend beyond my means but there's little point in saving for me. My ability to work can be limited by my disability/discrimination but if I have too many assets I'd be ineligible for financial support. Not all support is means tested in the UK, but it is for all the stuff I'm eligible for.
I've been scrimping and saving into a LISA for 3 years and even with the 25% government bonus I'm only at £8000. That's not a house deposit anywhere in the UK. It makes me depressed to think how long it would actually take, so I understand why many don't bother
Load More Replies... There was a time 'putting off buying an apple today, so you can buy 10 apples in two weeks' made sense. Now, the cost of buying '10 apples' is rising faster than people can save in 'two weeks', not to mention that by the time they CAN be afforded those '10 apples' will have been both reduced in size and enjoyment value.
Load More Replies... Even if they do without and scrape together a down payment, if they can semi afford the mortgage payment, they have an insurance payment and property tax that will push them over the edge.
My younger family members all complain they can't save enough to buy a house, but I see the biggest TV's with all the cable channels, fingernails and hair salon appointments, shopping at expensive malls, not Gabe's or big lots, eating out, door dash instead of meal planning, only work one job, always expecting older family members to finance their lifestyle, 2 new cars when only one person works...I mean, come-on!! The excuses never stop, and every single generation has dealt with economic depression, wars, incompetent president, etc...live how you want but don't come whining to me about how hard it is when my car is 21 years old with 170k miles on it. And I will drive it as long as possible to keep away from car payments.
I do know that many of today's younger generations are expecting and waiting for inheritances that include money that they are not saving themselves and houses they thus cannot expect to afford on their own. I am leaving my daughter's expected and counted on inheritance to my cats. I refuse to watch her spend all her money on lavish and wasteful things that I could never have afforded. And, no, I did not inherit my supposedly wonderful lifestyle and home from my parents.
I do know that many of today's younger generations are expecting and waiting for inheritances that include money that they are not saving themselves and houses they cannot expect to afford on their own. I am leaving my daughter's expected and counted on inheritance to my cats. I refuse to watch her spend all her money on lavish and wasteful things that I could never have afforded.
What happens when they reach retirement age? They'll have nothing, their possessions will be worth pennies on the dollar for resale, some won't even be worth anything. They'll all be living on the streets with designer shopping bags holding what little they have left. When others are living comfortably, they'll be scrounging and lining up at the soup kitchen. Sure, they think they're being "edgy" and "cool" now, but when they're old and have no earning years left, they'll be even further left behind. I wish they'd rethink this mindset and save SOMETHING for when their parents are dead and no longer bailing them out.
I doubt anyone is overspending because they are concerned about foreign affairs. Also, kids don't really cost that much. Turns out that you don't actually have to buy them the most expensive version of everything.
"Kids don't really cost that much". Sounds like something that someone who's never had kids would say. Kids aren't expensive because we're buying them Gucci backpacks for school. It's more of a death from a thousand paper cuts kind of thing.
Load More Replies... These young people complaining that homes are a million dollars so why save? That's just a way to rationalise their irresponsible spending habits. My first home was a barn that I renovated, then sold for an apartment I renovated and now I'm in a 1000 square foot home that needs to be renovated. Getting an affordable home is just something younger people don't want to work for anymore. They'd rather spend all their money on pleasure items and blame "boomers "for everything. When major corporations own all the rental property and keep jacking up the rent, just remember that you could have been home owners if you looked at more affordable homes that you could afford, improve, flip and move upwards.
Depends on where you live. In Orange County, CA, U.S.A., I looked at studio condos in non fancy complexes that asking was over 300k. The hoa was over $400 per month. I know of a small 2 bedroom 1 bath house, no AC, that needs a total replumb, new floors, new walls, mold abatement (pipes burst, nothing done to fix it other than turning off water for several years) probably needs electrical work and much more that could easily sell for over 500k. When you compare wages to housing costs, it is impossible for many to buy, not even a hunk of land without a building on it.
Load More Replies... Thanks I'll edit out my thoughts, they are not valid because typos and dyslexia.
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