Gen Z and millennials are increasingly ‘doom spending.' Here's what it is and how to stop it

Some young people are splashing out on luxuries like travel and designer clothes instead of saving, in a trend that's being characterized as "doom spending" on social media.

Doom spending is when a person mindlessly shops to self-soothe because they feel pessimistic about the economy and their future, according to Psychology Today.

It's happening because young people are chronically online and feel like they're constantly receiving "bad news," she said. "It makes them feel like Armageddon."

The practice is both "unhealthy and fatalistic," Ylva Baeckström, a senior lecturer in finance at King's Business School and a former banker, told CNBC Make It.

These young people are then translating these bad feelings into bad spending habits, Baeckström added.

In fact, 96% of Americans are concerned about the current state of the economy and more than a quarter are doom spending to deal with the stress, a Intuit Credit Karma survey of over 1,000 Americans found in November 2023.

And the phenomenon is not exclusive to America.

Stefania Troncoso Fernández, a 28-year-old publicist based in Colombia who lives with her parents, told CNBC Make It that she's a recovered doom spender, but that high levels of inflation and political uncertainty make it very difficult to rationalize saving money.

"I know for a fact that food [costs] are getting higher and higher every day, and in my house we can't afford to eat the same way we did maybe a year ago because things are getting more expensive," Fernández said.

Two years ago, Fernández said she was spending carelessly on clothes and travel despite the fact that she was earning less money than she does now. It was largely because she felt like she couldn't afford to buy a house.

"We used to have this