The rise of ‘doom spending’ and what it means for your finances

Several key psychological factors primarily drive doom spending. These psychological factors produce financially risky behaviors contrary to normal budgeting wisdom. Recognizing the emotional roots and patterns of doom spending is key to controlling its impact. They include:

• Pessimism. When people feel pessimistic about the future, whether due to economic factors, political instability or other reasons, they may adopt a "live for today" attitude. This manifests in lavish spending to enjoy life in the present moment.


• Lack of control. Doom spending allows people to regain some sense of control in chaotic, uncertain times by purchasing desired items or experiences. Actively spending gives them something tangible they can control.


• Impulsiveness. Anxiety negatively impacts impulse control and encourages reactive decision-making. When facing existential worries, people become more impulsive shoppers seeking emotional relief.


• Hyperfocus on mortality. Doom-and-gloom outlooks make people focus on their mortality. This instinct to maximize pleasure in whatever time they have left overrides rational financial planning for the future.

Doom spending as a defined term is relatively new, but the practice of reactive retail therapy during periods of societal doom and gloom has occurred for generations. Examining the historical evolution of these behaviors provides context on the psychology underpinning doom spending today.

Early origins can be traced to the world wars of the 20th century. Facing profound threats to normalcy and even survival, heightened anxieties manifested for many as living life to its fullest in the moment, consequences be damned. Partying, drinking and selfish luxuries surged during wartimes despite resource rationing and hardship.

During the Great Depression in the 1930s, the rise of escapist Hollywood movies and books similarly let struggling Americans mentally escape bleak financial realities. Retail therapy with the few discretionary funds they retained brought temporary relief from constant scarcity fears.

By the 1980s and the dawn of modern consumer credit systems, average households gained purchasing power facilitating doom spending habits previously reserved for the wealthy. Anxieties over the Cold War nuclear threat conveniently justified retail indulgences and credit card swiping sprees even for middle-income families.

Most recently, the spread of e-commerce simplified accessing tempting doom shopping outlets online. Both the 2008 financial crisis and 2020 COVID-19 pandemic, as mentioned, unleashed waves of therapeutic binge shopping targeted at mitigating the ambient anxiety. Everything from toilet paper hoarding to $10,000 designer purses reflect doom spending psychology rooted in uncertainty.

So while the doom spending terminology emerged more explicitly in recent years, the practice reflects human instincts for escapism and instant gratification during perceived existential threats. Periods of war, disease, financial turmoil or societal breakdown have always correlated to spikes in retail avoidance behaviors. Recognizing these historical patterns provides useful context for managing ongoing economic doom spending temptations.

Doom spending can have negative effects on personal finances and savings – its very nature works against long-term financial stability. A few major impacts include:

• Reduced savings. Doom spending often takes money directly out of savings accounts to pay for extravagant purchases, depleting assets earmarked for the future. This leaves fewer funds available for emergencies or retirement. Engaging in these behaviors can rapidly burn through prudent savings built up over years.


• Increased consumer debt. Without adequate savings, doom spending tends to get funded through credit cards or loans. This balloons costly debt obligations that eat into future income. Higher debt-to-income ratios then make securing additional healthy credit more difficult.


• Diminished retirement readiness. Between excess spending and growing debt burdens, less income gets allocated to retirement accounts or investments. This can majorly reduce the nest egg available later in life along with prospects of retiring on time or in comfort. Playing catch-up requires allocating more toward retirement at the expense of current lifestyle.


• Poor spending habits. Doom spending habits that ignore budgets or long-term planning can erode financial discipline in general. Giving in to indulgent instant gratification today makes it harder to correct overspending behaviors down the road. Saving or investing may come to feel more painful which distorts money perspectives.

While the occasional splurge may not undermine finances severely, habitual doom spending corrodes stability. Professional guidance from financial planners can illuminate harmless budget thresholds for indulgences. But left unchecked, doom spending behaviors plant the seeds of financial destruction that may not fully manifest until retirement years when it is too late. Establishing perspective around these long-term risks is critical, even amid short-term anxieties.

The key rests in acknowledging the anxious emotional roots behind the spending urge and then purposefully elevating logic and prudence. Patience, guidance and targeted perspective shifts help individuals take back control. Here are some recommended strategies and expert tips for managing doom spending behaviors:

• Budget diligently. Closely tracking all spending against a budget illuminates creeping overindulgences early before growing problematic. Tools like expense tracking apps help enforce limits.


• Delay gratification. For any compelling purchase urge, impose a mandatory waiting period before allowing the transaction. A week or more lets initial impulses subside.


• Assess value consciously. Before swiping any card, carefully weigh if the short-term happiness boost truly outweighs the long-term savings goal setbacks.


• Seek input. Discuss concerning spending patterns with trusted confidants who can provide grounding perspective. Their counterbalance can improve decisions.


• Avoid temptation triggers. Reduce engagement with promotional emails or websites that fan material desires. Seek quality over quantity in buying habits overall.


• Reframe mentally. Counter feelings of lack of control through proactive financial planning like paying off debts, which boosts efficacy.

In uncertain times, the temptation looms large to amp up retail therapy spending as a tonic for anxieties. Yet indulging in doom shopping risks significantly eroding financial stability down the road. While the occasional splurge may provide needed relief, establishing prudent limits and avoiding debt-fueled purchases is critical.

The phenomenon of doom spending holds centuries-old roots in human psychology. During periods of war, sickness, instability and fears around mortality, consumers consistently loosen budget reins for instant gratification. Modern financial systems and e-commerce may facilitate access to pricey coping mechanisms, but the behaviors reflect primal coping desires.

As economic, climate and societal doom scenarios abound, individuals worldwide have reported surging doom spending habits. The cases reveal a common thread – embracing life’s pleasures today counterbalances dread about tomorrow. Yet without diligence, short-term relief becomes long-term financial pain.

Guarding against doom spending’s pitfalls requires acknowledging its emotional drivers, delaying powerful impulses and consciously weighing value beyond cost. Budgeting, creative goal-setting and professional guidance all help place overindulgences in full context.

Rather than passively awaiting any looming “doom,” individuals can proactively take charge of their financial destiny. Care, wisdom and perspective-taking help build resilience no matter what tomorrow holds. Remaining thoughtful during turbulent times presents the ultimate retail therapy.