Are you doom spending
“Your order is on its way!” Is there any email subject line that brings more joy? But there could be more behind your motivations for hitting “buy now” than you expect. The results of a US-based survey, released in November 2023, by Qualtrics on behalf of credittracking company Intuit Credit Karma, found that over a quarter (27 per cent) of respondents reported “doom spending” to cope with stress.
The paper defines doom spending as, “spending money despite concerns about the economy and foreign affairs to cope with stress”. A more extreme version of retail therapy, doom spending is splashing cash on unnecessary purchases such as clothes, designer handbags, luxury skincare, expensive dinners and the latest gadgets to cope with anxiety and uncertainty.
Whereas retail therapy is a short-lived response, “doom spending” or “stress spending” can be a longer-term issue, and sometimes a sign of something more serious. Doom spending can put you at risk of debt or financial stress. This raises cortisol levels, increases anxiety and could negatively impact your mental health.
Research commissioned in 2022 by the Australian Securities and Investment Commission (ASIC) found that people experiencing financial challenges are at least twice as likely to encounter mental health issues than those who aren’t.
Doom spending can also cause rifts in relationships, evoke feelings of shame, and drain your bank balance of funds that could be spent on healthy food or activities to keep your health optimum such as a gym membership or yoga classes.
Doom spending is particularly prevalent among gen Z (35 per cent) and millennials (43 per cent), according to the Intuit Credit Karma report. Yet the report also found that they are also the demographics most likely to report feelings of financial anxiety. Several finance experts have suggested that young people might be doom spending on little luxuries due to disillusionment about their financial future and not being able to afford the more significant commitments like home ownership.
Dopamine chasing
If you’ve ever reached for your credit card after a bad day at work and immediately felt better, you’re not alone. There’s a science behind it.
The reason we get such a high from swiping our debit card is the dopamine rush it offers. This feel-good neurotransmitter is most notably involved in helping us feel pleasure as part of the brain’s reward system. Many things can cause a dopamine release, providing pleasure and positive reinforcement: sex, chocolate, alcohol and, yes, shopping.
“The purpose of dopamine is to inspire us to hunt,” explains Jane Monica-Jones, a financial therapist who works with clients that struggle with overspending and helps them reach their financial goals through behavioural and psychological changes. “If we were still living a more primitive life, it’s a chemical that makes us feel motivated or inspired to hunt or gather our food.
“The dopamine doesn’t turn up in the acquisition or achievement of [something], the dopamine occurs in the impulse or the motivation to go forth and hunt.” In other words, it’s the try on of the perfect shoes, the planning of the lavish holiday, or the test drive of the new car, rather than the actual buying.
“But that high is fleeting, then that dopamine level goes down. If we’ve had a hard day, we might think ‘there are shoes that will make me feel better’, and we’re back on the chemical rush again. It’s like addiction.”
Understanding how to harness the dopamine hit without sacrificing your bank balance could help. When feeling the urge to buy, pause, note the item (or add it to your online cart) and wait at least 24 hours before acting, allowing time for the dopamine’s effect to flow through the body. You may find that after the effect wears off, you don’t have the urge to buy.
Instead of shopping, find other ways to get this dopamine fix by doing things you enjoy. Perhaps that’s exercising, meditating, listening to your favourite song, playing with a pet or taking a walk in the sunshine.
According to Monica-Jones, setting and achieving goals is also a great way to get those feel-good chemicals. “When we set ourselves a goal, and then we achieve it, it’s really good for mental health and self-esteem,” says Monica-Jones. “We feel like we’re in control of our life, which builds confidence, a level of empowerment and self-esteem.”
Perhaps your long-term goal of buying a house isn’t attainable yet, but could you celebrate a small win by putting aside paying off part of your credit card bill each month? Hitting your goal in a saving or “no-spend” challenge with friends? Or putting aside a set figure each month to save for a holiday or weekend away?
Using a money journal or goal-setting diary can be a great way to gain clarification on your financial goals and track your achievements. There are also apps that offer this in digital form, and many of them “gamify” saving, offering a little taste of that dopamine hit and instant gratification.
Debt stress
With doom spending on the rise and living costs creeping up, Aussies’ credit cards aren’t getting much downtime. According to Money.com.au, which analysed data from the Reserve Bank of Australia, credit card usage in Australia has never been higher. The average credit cardholder in Australia has a monthly balance of $3076 and credit card spending is now 25 per cent higher than it was pre-pandemic.
Johanna Badenhorst, a developmental psychologist and director of a Brisbane-based psychology practice, says mindless spending (beyond the essentials) can result in an array of wellbeing issues. “There could be preoccupation about money, having to now figure out how to pay bills. Or being avoidant, leading to low mood and depressive feelings, or an anxious preoccupation. It could also create more insomnia at night-time, lying awake, trying to figure that stuff out, having a really restless mind…”
According to a study carried out in the US by Associated Press and AOL, those who reported high levels of debt stress were found to report an array of health issues. Of those with high debt stress, 51 per cent reported muscle tension including lower back pain, compared with only 31 per cent of those with low debt stress. Twenty-seven per cent reported ulcers and digestive tract problems, compared with eight per cent of those with low levels of debt stress. Twenty-three per cent reported severe depression, compared with four per cent with low debt stress, and six per cent reported heart attacks, which was double the rate for those with low debt stress.
And although technology and online shopping has offered convenience, it’s also opened the door for us to mindlessly consume. Actively taking steps to avoid temptation and to increase the effort required to spend can create a more mindful shopping experience.
Unsubscribe from newsletters that bombard you with special offers, unlink your PayPal or saved credit card details in online accounts, take cash when shopping so that you physically see where your money is going and how much is left at the end.
“Reduce the [likelihood of] triggers,” says Monica-Jones. “Walk to the park rather than near the shops at lunch time. Stop following stores on social media so you don’t see their ads or content.”
Self-care or self-sabotage?
With the seemingly endless bad news cycle of the past few years, it may be no surprise that shopping has become a coping mechanism for some.
“It can be a strategy to self-soothe,” says Monica-Jones, “to try to make ourselves feel better or ‘buy’ confidence … We go for that ‘high’, or that product, again and again as a way to build our self-esteem, our self-confidence, to downregulate or just make ourselves feel a little bit better.”
This inability to properly self soothe can result in a “treat yourself” mentality after a bad day. But this can blur the lines between self-care and self-sabotage, at least when it comes to finances.
If you feel the need for a treat or some self-care, Monica-Jones suggests putting your debit card away and reaching for something more wholesome and long-lasting. “True self-care is actually doing something that’s nourishing for ourselves and our physical health,” she says. “When we do other things like meditation, being in nature, having social connection and engagement with our friends, that nourishment is a lot more long-lasting and our cup becomes full.”
But being mindful with money doesn’t have to mean being “boring” or avoiding spending on little things that bring you joy. Little splurges and “treat yourself” moments can be a great way to bring happiness if they are controlled and done so in a mindful way. According to Badenhorst, having a separate account or allocated funds for “splurge” purchases, and keeping a limit on how much to spend from these can create a more mindful approach to spending, rather than one that’s impulsive and stress motivated. Doing this alongside a partner, friend or family member can also add an accountability element to ensure you stay within your limits.
Money mindfulness
Regular doom spending and chasing happiness chemicals such as dopamine and serotonin can be a sign of something more serious, so it’s important to try to identify the underlying motivation.
For some, it could be an attempt to fulfil an unmet need for happiness. “Some people may rely on those hormones to almost make them feel more alive again,” says Badenhorst. “So with depressive symptoms, there’s more likelihood for spending.”
For others, it’s an antidote to calm their worries or restless mind. “With anxiety, it’s the opposite,” Badenhorst explains. “It’s more to downregulate, wanting to soothe themselves with spending because they’re really highly aroused.”
Alongside being a psychologist, Badenhorst is also the host of the podcast ADHD Her Way, where she’s explored various facets of ADHD, such as addictive behaviours and impulsivity, something which can put some (although not all) people with ADHD at a higher likelihood of impulsive spending.
“Neurodivergent people have an intolerance to stressful triggers as it is, so there’s a likelihood that they are more prone to want to soothe that stress in a way that often is not so adaptive,” says Badenhorst. “That might be a mind-numbing spend or mindless scrolling, which immediately tells the brain they’re soothed temporarily, then afterwards the shame kicks in.”
Problems with overspending could also be an indicator of “oniomania”. A blend of the Greek word onios, meaning “sale”, and mania, meaning madness, oniomania is a compulsive shopping addiction. Whatever the underlying reason, if you feel out of control, or like your debt is spiralling, seek help. Speak to a therapist or psychologist, or your GP can be a good starting point.
Try keeping a diary to document what was going on and how you were feeling when you were doom spending. Had you fought with your partner that day? Felt rejected at work? Seen an upsetting news headline? “Bring awareness to when it happens, and how it happens,” says Badenhorst. “Because maybe it can be specifically tied to some moments of vulnerability, or a certain emotion. If it’s when you’re feeling quite sad or rejected, perhaps you can tie it to certain times.”
Approaching doom spending with self-kindness is essential, according to Badenhorst. “Adopt self-compassion. Being really kind to yourself when slip-ups happen as opposed to being self-critical is crucial.
“Still have boundaries but come at it with self-kindness, removing the ‘shoulds’. It’s more a mindset of ‘I deserve’. ‘I deserve to have a good budget that allows me to live the life I want’.”
