Do you even need an explanation
From the article (saved you a click):
KEY POINTS
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Nearly all Americans are concerned about the current state of the economy.
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Still, many continue to spend more and save less.
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“Doom spending” may be one way to cope with stress as economic fears mount, however, it comes at the expense of your financial well-being.
Still, many continue to spend more and save less.
That’s what happens when literally everything costs more than it used to.
That may be part of it but isn’t a full explanation. For instance black Friday spending increased by 7.5% compared to last year, whereas inflation increased 3.2% over the last year.
https://www.cnbc.com/2023/11/28/black-friday-weekend-shopping-turnout-soars-to-a-record.html
https://www.bls.gov/news.release/archives/cpi_11142023.pdf
People are increasing their consumption still.
I think there’s a real argument to be made in favor of the doomspending hypothesis, particularly with younger millenials and housing. If you accept that you’re simply not going to be buying a house any time remotely soon, the temptation grows to just say fuck it and go buy some nice stuff or go on a trip.
Speaking with an n of 1, I’ve certainly noticed I tend to spend more impulsively when stressed. Definitely a theory.
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It’s basic Econ 101. People buy more in high inflation periods because they know the same goods will cost more in the future.
You make a good point about people who are informed or educated enough to actually recognize that. Ignoring the future vs present worth of money aspect.
There are a shit ton of folks out there who don’t know what inflation actually is. I’d say they probably fall into the doom spending category.
“Every dollar you set aside will compound.”
Out of touch as fuck. If the fees don’t take it, the inflation will.
It compounds their profits as they make more from the deposit than you! That’s what he really means.
Use a brokerage like Fidelity as your bank instead of these fuckers at Chase and BofA who don’t respect you despite you giving them your money.
Doesn’t have to be Fidelity, but in the current day if you’re not getting the following from your bank you’re getting fucked:
- $0 minimum balance, $0 in account fees
- No overdraft fees
- Minimum 4% APY on savings, minimum 2% APY on checking
- ATM fee reimbursement
- Instant transfers between your own accounts
- Access to direct deposits even while they’re still pending
I spent much of my savings on random computer parts because inflation is so bad anyway it feels worthless. And the future is bleak. I enjoy the fancy monitors ect now a lot more than an extra number in the bank they just use as loan collateral for someone else.
