Description: Learn how to combat election anxiety and financial stress through smart spending and saving strategies. Get tips on how to take control of your finances and break the cycle of doom spending.
Combatting Election Anxiety with Personal Finance
As the presidential election looms, many Americans are feeling the weight of uncertainty. This anxiety is not only impacting voters’ mental health but also their wallets. According to a recent report by Intuit Credit Karma, about 27% of shoppers are engaging in “doom spending,” which is splurging on purchases despite concerns about the economy and foreign affairs. This phenomenon is especially prevalent among younger generations, with 37% of Gen Zers and 39% of millennials admitting to engaging in doom spending.
It’s no surprise that the state of the world and the economy are top concerns for many Americans, with 60% of surveyed individuals expressing worry, up from previous years. The cost of living, inflation, and the presidential election are among the top stressors for doom spenders.
Understanding the Psychology Behind Doom Spending
Shoppers engaging in doom spending may be seeking a sense of control in a tumultuous world. Courtney Alev, a consumer financial advocate at Credit Karma, suggests that the rise in doom spending is particularly pronounced among young people who are “chronically online,” consuming vast amounts of information and turning to shopping as a coping mechanism. In fact, 70% of Gen Zers and 52% of millennials consider themselves to be “chronically online.”
Impulse purchases driven by social media influence are also on the rise, with the average annual spending on such purchases totaling $754 according to a Bankrate.com survey. This trend, exacerbated by the pandemic, reflects a deep-seated sense of financial insecurity among young consumers grappling with student loan debt and housing affordability challenges.
The Financial Consequences of Doom Spending
Doom spending can have lasting repercussions on individuals’ financial well-being. Credit card balances in the second quarter of 2024 reached $1.14 trillion, with half of cardholders carrying a balance every month. The cycle of debt is becoming increasingly difficult to break, as more individuals are holding credit card debt for extended periods. High-interest rates further compound the issue, making it challenging for consumers to pay off their debts.
As we approach the holiday season, the temptation to engage in impulse spending and go into credit card debt looms large for many Americans. A survey by Morning Consult found that 20% of respondents plan to accumulate credit card debt during the holiday season, adding to the burden of existing debt. Credit card debt among Gen Z and millennials has seen a significant uptick since 2022, further exacerbating financial challenges for young consumers.
Breaking the Cycle of Doom Spending
To regain control over your finances and break the cycle of doom spending, it’s essential to have a plan in place. Setting aside a budget for discretionary spending can help curb impulsive purchases and prevent unnecessary debt accumulation. Allocating funds to a high-yield savings account can also yield better returns and promote disciplined saving habits.
By taking proactive steps to manage their finances, individuals can navigate through turbulent times with greater resilience and financial stability. It’s crucial to prioritize long-term financial well-being over short-term gratification and make informed decisions that align with one’s financial goals.
At Extreme Investor Network, we understand the challenges of managing personal finances during periods of uncertainty. Our experts provide valuable insights and strategies to help you navigate through economic turbulence and achieve financial success. Stay tuned for more tips and resources to empower your financial journey.