What is Doom Spending and How Do You Avoid It?

Since the invention of money, humans have been using it to make themselves feel better. So "doom spending" isn't so much a new behavior as it's a new label for an old behavior, uniquely tailored for the times we live in.

But doom spending is a real phenomenon, with real consequences, rooted in the challenging financial landscape we're all living through. Understanding the psychology behind it can go a long way toward saving yourself from developing unhealthy spending habits. So let's dive into doom spending: what it is, who's doing it, and how to prevent it from happening to you.

What is doom spending?

Doom spending is just a variation of emotional spending, where we spend money and make purchases to give ourselves a (usually fleeting) bit of happiness and fulfillment. 

What makes doom spending unique is that the trigger is a general sense of pessimism about our personal financial future. For many, big financial goals like buying a home no longer feel achievable. Retiring with a comfortable nest egg doesn't seem possible. Even getting out of debt and living comfortably can feel totally out of reach for many Americans.

That pessimism leads to feelings of hopelessness. And if a better future doesn't seem possible, then why not get whatever happiness you can today?

Who's doing it?

According to study from Credit Karma, 27% of Americans admit to doom spending as a way to deal with stress. The percentage is higher for millennials (39%) and Gen Z (37%). 

While emotional spending can impact people at any age, it makes sense that this particular brand of emotional spending is more prevalent with younger adults. These are generations that came of age at a time when building wealth is incredibly difficult. The cost of living is tremendously high and the price of homeownership can be completely impossible depending on where you live. 

So it's understandable why so many members of those generations may feel like the hard work of saving money and maintaining a strict budget just isn't worth it in the end. If you don't think a goal is achievable, it's hard (if not impossible) to stay motivated.

How can you prevent doom spending?

Increasing incomes and making housing more affordable would go a long way toward getting the doom out of your doom spending, but those kinds of massive changes are likely out of your reach.

Instead, what you can do is build helpful systems in your day-to-day life that make reckless spending harder.

• Create a guilt-free spending allowance. Automatically fund savings, bills and debt payments first, then designate a fixed amount that's available for restaurants, travel, hobbies, clothes, etc. You can do whatever you want with that money, because you specifically set it aside to be used however you like.
• Automate everything. The less you manually touch your money, the fewer opportunities there are to doom spend. 
• Use a waiting period. For unplanned purchases above a threshold—say $50 or $100—put the item on a list and wait 24–72 hours. You're not saying “no”; you're saying “not yet.” A surprising number of wants disappear when you're no longer in the heat of the moment.
• Make impulsive purchasing inconvenient. Delete stored credit-card information, unsubscribe from promotional texts, turn off shopping notifications, or remove shopping apps from your phone. Just one extra minute of friction can be enough to interrupt the reward loop and stop you from making a purchase you'll later regret..
• Less doomscrolling = less doom. Bad news tends to make us feel more pessimistic about the future. Simply spending less time online and on social media can help reduce the general feeling of hopelessness that usually precedes doom spending.
• Keep goals small and achievable. “Save $100,000 for a house” can feel totally pointless when you're starting with $500. Instead, try to keep your goals smaller. "Save $1,000 in the next four months." Celebrate each success and then move on to the next achievable goal.
• Track the trigger, not just the purchase. When you buy something impulsively, think about what was happening immediately beforehand. Were you bored, anxious, scrolling Instagram, reading the news, etc. These triggers often develop into a pattern. If you can recognize the pattern, you can start making changes to potentially prevent the trigger from happening in the first place.

It's easy to understand why people might feel hopeless about their financial future. The problem is that reckless, emotional spending almost always takes a bad situation and makes it exponentially worse.

If you've found yourself doom spending and need help getting back to square one, MMI can help. We offer free financial counseling and our customized debt repayment plans have been proven to help consumers get out of debt 7x faster than paying on their own. No matter how hopeless you may be feeling, there is a way forward.