“My mental health is constantly at risk due to stress from work and family. I often find myself spending impulsively, which has negatively impacted my finances,” said James in a survey conducted by BusinessDay.
Doom spending is a growing trend where younger generations, such as Gen Z and millennials, engage in impulsive spending to cope with economic uncertainty and stress.
This behaviour is characterised by spending on luxury items like travel, clothing, or gadgets, instead of saving for future needs. It reflects a mindset where traditional financial goals feel unattainable due to rising living costs, stagnant wages, and economic instability.
A survey by BusinessDay titled: “Poll for Gen Z and Millennials in Nigeria on Doom Spending” examined the frequency and factors influencing impulsive spending behaviours among respondents dealing with economic stress.
Respondents rated their tendency to make impulsive purchases, with results indicating that a significant portion, 57.1%, reported often engaging in such behaviour. Only a small percentage indicated they never or rarely make these purchases.
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The survey also explored the primary factors that drive impulsive spending. Respondents identified emotional well-being as the most significant influence, with 71.4% acknowledging its role.
Other factors included economic instability and high cost of living, each receiving 14.3% of the responses. Social media influence and peer pressure were not identified as major contributors.
These findings suggest that emotional well-being plays a critical role in impulsive spending during challenging economic times. The data highlights a need for individuals to recognize the underlying motivations for their purchasing behaviours.
However, a U.S. survey by Intuit Credit Karma, shows that over a quarter of respondents admit to doom spending to manage financial stress. This behaviour spans globally, with similar frustrations seen in countries like Nigeria, where economic challenges such as high inflation, unemployment, and political uncertainty drive short-term spending.
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In Nigeria, inflation soared to over 24% in 2023, the highest in two decades, further eroding financial stability for young people. Rising food and fuel prices and a youth unemployment rate exceeding 33% have led many to focus on immediate gratification rather than long-term financial planning.
Instead of saving for homes or investments, young Nigerians often turn to entertainment, fashion, or gadgets for temporary relief from economic anxiety.
Doom spending stems from emotional responses to pessimism about one’s financial future. In regions like Africa, where socioeconomic inequality and job insecurity are widespread, this behaviour serves as a coping mechanism for dealing with economic stress.
Surveys indicate that only a minority of people worldwide feel they are better off financially than their parents, a sentiment that resonates in Africa as well, where traditional financial milestones, such as homeownership or retirement savings, seem out of reach.
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Though doom spending offers short-term comfort, it can lead to financial instability. Impulsive purchases often result in debt and reduced savings, exacerbating the financial anxiety individuals are trying to manage. For many young Nigerians, this creates a cycle where spending to alleviate stress leads to greater financial challenges.
The rise of online shopping and fintech solutions in African markets has made spending more accessible, but also more prone to impulsive behaviour. With seamless payment options like mobile banking and buy-now-pay-later services, it’s easier to make unplanned purchases without considering long-term consequences.
Financial experts emphasize the importance of addressing the emotional triggers behind doom spending. By understanding their relationship with money, individuals can adopt healthier coping mechanisms and develop a more balanced approach to spending and saving.
In Nigeria, promoting financial literacy and responsible budgeting is crucial for encouraging long-term planning. Practical strategies like using cash for purchases, setting up mobile banking alerts, and practising mindful spending can help create a sense of financial control and security.
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