Doom Spending Is Not Self-Care

(Bloomberg Opinion) -- Please, don’t dabble in doom spending.

The term, which first bubbled up on social media, has gained steam following a recent survey by Intuit’s Credit Karma. Consider it 2024’s sequel to 2023’s “girl math.” But if girl math was a light-hearted buddy comedy, doom spending is a horror film.

It’s not the same as retail therapy — shopping to ease personal woes like a breakup or a bad day at work. Doom spending is “spending money despite concerns about the economy and foreign affairs to cope with stress,” says the credit-tracking company, and about 27% of Americans say they’re doing it.

Self-reported rates of doom spending are higher among men; according to Credit Karma’s survey, 33% of men admit to doing it compared with only 21% of women. But it’s the women I’m more worried about, because women already typically face a tougher road to financial independence. We earn, save and invest less. We have more student debt.

The survey also finds that young women are much more likely to doom spend than their mothers and older sisters. Throw in the financial precarity dogging millennials and Gen Z — the New York Fed noted Tuesday that a rise credit card and auto loan delinquencies was especially pronounced among younger borrowers — and you have a recipe for misery.

“The economy sucks, there’s global warming, there’s constant political and social unrest globally,” one 24-year-old told Bloomberg News, justifying her purchase of the occasional “little luxury,” like the vintage Chanel bag she picked up for $2,500. (Fact check: While inflation has been painful, it would be a real stretch to say this economy objectively sucks.)

“It’s just easier to spend money on things that will bring you immediate fulfillment,” she continued, especially when saving doesn’t seem to bring life’s major expenditures — a home, children — any closer.

She’s right that the rising cost of living has hit younger people, along with all lower-earning people, especially hard. But at the risk of sounding like a scold, a little luxury is a latte, not a four-figure bag.

Consumer economies thrive by stoking our fears that we’ll be left behind if we don’t buy the new, new thing. “Our susceptibility to status symbols comes from our deep need to be accepted, but it is also a way of protecting ourselves,” writes psychology professor Bruce Hood in . Luxury goods may change how people perceive us — or, just as important, how we see ourselves.

When resources feel scarce or our situation chaotic, we focus on what we can control. Expensive items carry even more heft in social groups where truly big-ticket items like houses are seen as out of reach, Hood notes in the book. The power of luxury goods comes from the way human beings constantly compare ourselves. It’s easy to forget that the couple posting enviable photos of their new home might not be able to afford it — or conversely, that they may have benefitted from inherited wealth.

Corporate marketing departments have long been aware of these psychological tricks. And they’ve long chased after the female consumer, who controls the majority of household’s discretionary spending despite her lower earning power.  

Historically, those appeals targeted the female buyer’s independence and self-worth, whether that’s “You’ve come a long way, baby,” (Virginia Slims pitching equal opportunity lung cancer) or “Because you’re worth it” (L’Oreal selling hair dye). The modern equivalent would be all those algorithm-targeted ads selling teas, acupressure mats and subscription supplements as “self-care.”

Doom spending is this same splurge-to-treat-yourself message in the Upside Down. “You’ll never get there, baby,” or “Because nothing’s worth it.” 

But young women literally can’t afford to give into such cynicism. In a 2022 report by the Financial Health Network, 44% of women ages 18-29, compared with 34% of men the same age, said debt has led them to delay major life milestones like marriage, homeownership and children. Women are also more likely to say their debts are unmanageable.

Putting yourself in a financial hole isn’t smart or empowering.

Real self-care is creating and sticking to a budget. It’s true that the old rules of thumb — 50% for needs, 30% for wants, 20% for savings and paying down debt — might not be possible, particularly for younger earners who are earlier in their careers. Housing, food and transportation could eat up 50% of your budget, as they do in the average American household, before you even get to necessities like health care or education. But that doesn’t mean we throw up our hands and buy Chanel. It means we save 10%, or 5%, or whatever we can manage. It means we try to move up the income ladder while also fighting for a fairer society. It means our splurges are $250, not $2,500.

There’s nothing wrong with a little girl math — like dividing the cost of a purchase over the number of times you’re likely to use it (that’s basically just a form of amortization). There something deeply wrong with seeking a momentary mood-boost by spending money you don’t have, and then ending up with credit card debt or with nothing saved for retirement.

If we ignore that math, doom spending may go from nihilistic coping mechanism to self-fulfilling prophecy.

This column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.

Sarah Green Carmichael is a Bloomberg Opinion columnist and editor. Previously, she was an executive editor at Harvard Business Review.

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