What is Doom Spending? How to Avoid Excessive Debt

Doom spending refers to impulsive or excessive money spending when stressed or anxious. It’s often a coping method that shows up during tough economic times (think global crises, personal difficulties, or when the future seems uncertain. Spending money is quick medicine when you feel helpless or out of control.

But, there are some consequences related to impulsive buying. Let’s explore doom spending and how you can protect yourself from unnecessary spending debt.

The Psychology Behind Doom Spending

Several psychological factors drive our needs, leading to doom spending:

• Instant gratification: The human brain likes to seek pleasure and avoid pain. Spending money on things we want gives us a quick dopamine hit. The temporary escape from stress and anxiety drives our desire to spend.
• Control and autonomy: During uncertain times, people may feel powerless. By spending money, they gain control over one aspect of their lives. That gives them a sense of much-needed autonomy and empowerment.
• Social media influence: Social media often shows idealised images of luxury and success. Comparison can create pressure to keep up with others. As a result, humans spend beyond their means to fit in with societal expectations.
• Retail therapy: Shopping is often marketed as a way to care for oneself. Retail therapy can feel desirable during tough times, with spending as a valid way to boost mood and morale.

The Impact of Doom Spending on Millennials & Gen Z

Millennials and Gen Z-ers are particularly prone to doom spending, for several reasons:

• Economic challenges: These generations have faced significant economic challenges (e.g. the 2008 financial crisis, COVID-19 pandemic, high inflation), along with rising living costs and stagnant wages. Saving for long-term goals, like buying a house, often feels unattainable.
• Delayed milestones: Many younger generations feel delayed when it comes to traditional milestones such as homeownership, starting a family, or securing a stable career. Such uncertainty can fuel a desire for immediate gratification through spending.
• Cultural Shifts: There is a cultural change towards valuing experiences over material possessions. This shift, combined with the pressure to document and share these experiences on social media, can drive impulsive spending.

The Consequences of Doom Spending

While overspending can provide short-term emotional relief, it can lead to several long-term financial consequences:

• Accumulated Debt: Frequent, impulsive purchases can quickly add up. That leads to credit card debt and financial strain. And high interest rates on unpaid balances can make the problem worse. Soon, you are in a cycle of debt that’s hard to escape(and could lead to Bankruptcy).
• Undermining financial goals: Cash spent on non-essential items is money not saved or invested. This can delay or derail important financial goals, such as buying a house, saving for retirement, or building an emergency fund.
• Emotional toll: The temporary high from spending is often followed by mental health issues and increased anxiety about financial security. This emotional rollercoaster can perpetuate the cycle of spending as a way to cope with negative feelings.

Strategies to Avoid Excessive Debt From Doom Spending

Breaking the cycle of impulse buys and debt requires practical strategies and psychological shifts. Here are some effective ways to curb doom spending:

• Create a budget: a clear budget is a crucial step in finance management. Track your income and expenses to understand where your money goes. Allocate specific amounts for discretionary spending and stick to these limits. Good financial literacy helps you better manage your money.
• Build an emergency fund: A financial cushion can reduce the anxiety that drives overspending. Aim to save three to six months’ worth of living expenses in an easily accessible account. Your emergency fund can provide peace of mind and a buffer against unexpected expenses.
• Set financial goals: Define your short-term and long-term financial goals. Whether that means a down payment on a house, paying off debt, or retirement investments , clear objectives can motivate you to avoid debt and prioritise saving over spending.
• Identify triggers: Reflect on the situations or emotions that prompt you to spend impulsively. Is it stress from work, boredom, or peer pressure? Understand your triggers so you can develop healthier coping mechanisms.
• Practise mindful spending: Before you buy, pause and consider whether it’s a need or a want. Ask yourself if the item will bring lasting value or joy. If possible, follow a wait period before you buy non-essential items. A 24 hour rest can curb those impulsive decisions.
• Find alternative coping strategies: Replace retail therapy with healthier stress management. Exercise, meditation, creative hobbies, and time with loved ones can provide comfort and fulfilment—without the financial cost.
• Limit exposure to temptation: Unsubscribe from marketing emails, online stores, social media platforms that trigger a fear of missing out. Curate your environment to support your financial goals.
• Use cash instead of credit: cash can make the spending experience more tangible. The physical act and awareness of a money transaction helps limit the amount you spend (rather than unlimited credit card swipes).
• Create a spending plan for fun money: Allow yourself a fixed amount of “fun money” each month for discretionary spending. Enjoy the occasional treat—without derailing your budget or financial goals.
• Seek professional help: If your spending habits hurt your financial health and emotional well-being, consider consulting with a professional. A Licenced Insolvency Trustee (LIT) can provide tailored advice and support to help you regain control of your finances.

Get Out of Debt and Stay Out with Allan Marshall & Associates

Impulsive buys are not worth the long-term cost of debt. Luckily, you can use the strategies listed above to help you curb your spending. And if you need additional help and support, please contact Allan Marshall & Associates for professional assistance.

Allan Marshall & Associates, Inc. is licensed by the Canadian government to help consumers get out of debt and stay out of debt. Speak with a Licensed Insolvency Trustee to see if Bankruptcy, a Consumer Proposal, or credit counselling is right for you. Call 1 (888) 371-8900 or submit our secure form to arrange a free consultation in New Brunswick, PEI, Nova Scotia, Alberta, or BC. Get accurate information and answers to your questions to find the right solution for your unique situation. We’ll help you achieve your goal and start fresh!