‘We’re using that down payment or kid money’: This TikToker says stress just makes her spend — here's why she says Gen Z and millennials are stuck in a 'doom spending' spiral

What’s behind this trend

Doom spending, as Credit Karma defines it, is “spending money despite concerns about the economy and foreign affairs” as a means to “cope with stress.”

Here’s what that looks like: Geopolitical strife? Buy a blender. Unaffordable housing? Time to book a vacation.

The personal finance company explains in a recent report that a heady combination of inflation, stagnating wages and rising housing costs have led 27% of Americans to “doom spend.”

And the phenomenon, Credit Karma points out, is most common with younger generations as 35% of Gen Z and 43% of millennials report they deal with stress by spending.

Melchor offers some insight on their rationale: “When older people ask me how young people are affording nice things that they wouldn’t even buy for themselves, I tell them it’s because we can’t afford anything else.”

Part of it does seem to come down to priorities. A 2023 survey](https://www.intuit.com/blog/wp-content/uploads/2023/01/Intuit-Prosperity-Index-Report_US_Jan-2023.pdf) from fintech company Intuit discovered that 3-in-4 Gen Z would rather have a better quality of life than more money in the bank.

Younger generations added they don’t feel strongly about saving for retirement, the survey also noted — which may be another side of the same trend.

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But does she have a point?

Doom spending might seem like a dramatic overreaction to coming of age in a tough economy, but does Melchor have a point that even without their daily indulgences, homeownership still feels out of reach?

The median age for a first-time buyer is now 35, the second highest age ever, according to the 2023 data from the National Association for Realtors (NAR), which has been collecting data on this since 1981.

The increased age for homeowners is likely connected to the sky-high home prices that throttled real estate markets across the country. NAR reports that the median selling cost for a home is $398,000. A 20% down payment — the recommended amount — requires nearly $80,000 in cash from the buyer.

Most Americans — no matter their age — don’t even have an extra $400 on hand, let alone $80,000.

These days, even rich young people are opting to rent rather than buy thanks to explosive mortgage rates.

“We’re going to relinquish any lingering delusions about homeownership,” Melchor says. “And instead use that money to give our dogs the most enriched puppyhood they can have.”