If one isn’t careful, however, doom spending can be a self-fulfilling prophecy, where the risk of living paycheck to paycheck is much higher.
That’s the case for Adrian Siega, 26, who recently spent the last of his emergency savings to buy an imitation of a Burberry tote that was featured on the popular HBO show “Succession.”
Siega moved to New York from the Philippines in 2019, with the goal of getting into college, finding a job and buying a home. But as time has gone by, he’s felt his dreams of homeownership slipping out of reach. While he hopes to finally go to college this year, he’s still living with his mom and receiving financial support.
“Thirty years ago, an apartment in Elmhurst was $90,000, and now it’s $400,000 for a one bedroom; that’s insane,” said Siega, a personal care assistant. So for now, he’s focused on what’s “needed for the moment”—skin care products, a pea coat and a knockoff Hermès 35cm Birkin Gold Togo bag for $1,088.
A Different Path
Costly purchases can seem misguided. But if a person has given up on the dream of a suburban life with kids, that’s not necessarily the case, said Maria Melchor, a 27-year-old content creator focused on financial education for Gen Z.
In a TikTok with more than 1.8 million views, the Yale graduate says that when older people ask how young people can afford things they never buy for themselves, she says it’s because they can’t afford anything else.
“Homeownership or starting a family is so out of reach that we’re using that down payment or kid money on whatever it is we can afford that will bring us semblance of the kind of adulthood we were promised,” she says in the video.
In an interview, she said she wouldn’t classify Gen Z’s indulgence in luxury items as doom spending. Rather, it’s a glimpse into what life could look like for more people, if not all their money was spent on real estate and children. Marriage and birth rates are in decline and remote work, at least for some, opened up the possibility of not being tied down to a single zip code.
“I think the ‘dream’ is changing,” she said.
This article was provided by Bloomberg News.