Economic concerns heighten as young Americans doom spend to cope with stress

• 60% of Americans are concerned with the current state of the world and economy - top worries include cost of living (55%), inflation (43%) and the upcoming presidential election (28%).
• More than a quarter (27%) of Americans "doom spend" to cope with stress, which is the case for 37% of Gen Z and 39% of millennials.
• 70% of Gen Zers are chronically online, and 53% say that receiving bad news online/social media drives them to stress spend.

Elevated stress levels among Americans are putting a damper on their finances as spending money becomes a key coping mechanism.

According to a study conducted by Qualtrics on behalf of Intuit Credit Karma, 60% of Americans are concerned with the current state of the world and economy, and the top worries among this group include the cost of living (55%), inflation (43%) and the upcoming presidential election (28%). Other worries burdening Americans include unaffordable housing (21%), their wages not keeping up with current costs (21%) and foreign affairs such as wars (14%).

Of those who are concerned about the current state of the world and economy, 43% say not having enough money to afford necessities like food, clothing and rent/mortgage worries them the most about how they could feel the impact, followed by having their savings depleted (31%), their retirement funds taking a hit (28%) and not being able to spend money on things that bring them happiness (28%).

Uneasy feelings have festered for the past year with 71% of Americans admitting they are more worried about the state of the world now than they were a year ago, and 61% feel the same about the economy. Uncertainty can take a toll on people's mental health, perhaps driving unhealthy coping mechanisms. In fact, 63% of Americans say that the current state of the world and economy gives them anxiety about their finances, impacting how 59% of Americans spend their money.

To cope with stress, more than a quarter (27%) of Americans are doom spending, and 40% say they doom spend more now than they did a year ago. For the purposes of this study, "doom spending" is defined as spending money despite concerns about the economy and foreign affairs. This phenomenon is most common among younger generations (37% of Gen Z and 39% of millennials), validated by their instinct to spend money to cope with their emotions, including anxiety, uncertainty and depression (47% of Gen Z and 42% of millennials).

Instead of channeling concern into responsible financial management, more than one-third (36%) of Americans say they can't rationalize saving money due to feelings of uncertainty about the world and economy, increasing to 47% of Gen Z and 43% of millennials. This could be why nearly one-in-five (19%) Americans have $0 in savings right now. Sadly, this has 44% of Americans feeling pessimistic about their financial future, and another 43% have given up on achieving certain financial milestones because they feel too out of reach. The primary financial goals that feel out of reach for Americans, include saving money (42%), paying off debt (26%) and being able to upgrade their living situations (26%).

Young people are chronically online, and it's taking a toll on their finances

More than half (53%) of Americans say they feel like they're constantly receiving bad news online. Among them, 44% admit to being chronically online, which is the case for a whopping 70% of Gen Z and 52% of millennials. For the purposes of this study, being chronically online entails spending a large amount of time online and prioritizing internet culture over other aspects of life.

The top reason people spend money to cope with their emotions is because it helps relieve their stress (50%), so it's no wonder more than half (53%) of Gen Z and 49% of millennials say that receiving bad news online/social media drives them to stress spend. Interestingly, men are twice as likely than women to stress spend when receiving bad news online (48% versus 23%).

While nearly half (49%) of Americans prioritize being online and on social media in order to stay informed on what is happening in the world, roughly one-third (34%) recognize that they'd spend less money if they cut back on their screen time. That awareness has 67% of Gen Z and 58% of millennials planning to spend less time online/social media to help with their stress levels.

What will 2025 bring?

As we gear up for a new presidency, and near the end of the year, Americans have mixed feelings on what to expect when it comes to the economy in 2025. For one-in-10 (10%) Americans, that entails having zero feelings of optimism about next year's economy. Although, interestingly, some of the things Americans are most and least optimistic for in the new year, overlap. For instance, one in five (20%) Americans are most optimistic about inflation returning to normal, while 14% are least optimistic about it. And, while 11% feel most optimistic about the general economic effects they'll experience from the upcoming election, 13% are feeling the least optimistic about the impact.

"It's been a tumultuous year for many Americans, and with the election right around the corner, politics can often add to people's stress levels," said Courtney Alev, consumer financial advocate at Credit Karma. "Time and time again, we see people spending money to cope with their emotions and relieve stress, and while it might result in short-term relief, it can have long-term negative implications on their finances. Young consumers, who spend much of their time online and on social media are especially susceptible to the impact that doom scrolling can have on their wallets. Social media helps people stay informed, but it can also cause undue stress depending on the type of content people consume. Our study found that young Americans plan to make an effort to spend less time online to help with their stress levels, but for those who struggle to cut down on their screen time, it's important to rely on healthier channels than spending money to relieve stress, whether that be exercise, meditation or taking up a new hobby."

Methodology

This survey was conducted online within the United States by Qualtrics on behalf of Intuit Credit Karma between October 25, 2024 and October 29, 2024 among 1,001 adults ages 18 and older.