Young people are spending money like there's no future, and they may be onto something. A 2024 Credit Karma survey found that 27% of Americans engage in what researchers are calling "doomspending," the practice of frivolous retail purchases made to cope with financial anxiety. The numbers spike dramatically among younger cohorts: 37% of Gen Z and 39% of millennials admit to the behavior.
The term itself is fresh, but the underlying phenomenon reflects something deeper than a shopping habit. It represents a rational calculation about an economy that no longer rewards patience.
The generational divide over spending reveals a fundamental disagreement about how the economy works. Older Americans, particularly baby boomers, were shaped by a world where saving young and spending old made mathematical sense. They saw financial restraint as a moral virtue and watched their dollars stretch across decades of declining consumer prices.
That script no longer applies. Since the 1990s, the U.S. dollar has lost 60% of its purchasing power relative to the era when boomers were in their prime earning years. Since the 1970s, the decline reaches 88%. Meanwhile, the costs that actually matter to young people have exploded: housing, healthcare, and education now consume record portions of income relative to wages.
Consumer goods are cheaper. Rent is brutal. The math no longer works for delayed gratification.
This isn't merely about shopping habits. It reflects a deeper loss of faith in the system itself. Younger generations watched wealth accumulate among those who played by the rules, then watched the rules change. Tech monopolies mediate economic life. Assets move between international financial centers. The ordinary person who works diligently can no longer reasonably expect a stable, comfortable future.
When Kevin O'Leary recently went viral criticizing Gen Z for $28 lunches, he was recycling arguments boomers made about millennials and avocado toast a decade earlier. But the premise misses the point entirely. Young people aren't spending recklessly because they lack discipline. They're spending today because tomorrow's economy is fundamentally uncertain.
The frustration older generations express about doomspending reveals something telling about their worldview: they still believe financial habits are moral habits, that frugality signals virtue and spending signals vice. This belief assumes the economy itself is fundamentally fair, that wealth reflects hard work and competition.
Young people increasingly reject this premise. They see an economy rigged for capital accumulation at the top while wages stagnate below. Whether that perception is accurate is almost beside the point. If enough people stop believing the system rewards rule-following, they'll rationally stop following the rules.
Gen Z watched proto-universal basic income arrive during Covid lockdowns, then saw it disappear. They're now watching artificial intelligence decimate white-collar job prospects. They wait, somewhat patiently, for the next model to arrive, understanding that something structural is changing.
Doomspending becomes a self-fulfilling prophecy. Spend today because there's no tomorrow, and you guarantee there's no tomorrow. The only way to reverse it is to restore what younger generations have lost: the genuine belief that playing by the rules leads somewhere worth going.
Author James Rodriguez: "The anger over doomspending reveals older generations still believe in an economy that no longer exists, and younger generations know it."
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