You’ve probably heard of “doom scrolling,” but have you heard of “doom spending”? It’s an issue for many people. A recent Intuit Credit Karma study found that 27% of Americans are doing so to cope with stress. Factors like cost of living increases, inflation, and lack of affordable housing are causing added financial stress.
Are you spending beyond your means to cope with anxiety? Find out what you can do to stop overspending so you don’t continue to harm your finances.
Americans are concerned about the economy
If you’re feeling uneasy about the economy, you’re not alone. The Intuit Credit Karma study showed that 96% of Americans are concerned about the current state of the economy. Of the study respondents who are concerned about the economy, these are their top worries:
48% fear not having enough money to afford necessities like food, clothing, and rent
34% are most concerned about going into debt
30% are worried about not being able to spend money on things that bring them joy
How are Americans dealing with these fears? More than a quarter are “doom spending.” The study defines this as spending money, despite concerns about the economy and foreign affairs to cope with stress.
While spending money on things that make you happy can provide some stress relief at first, overspending can lead to consequences that cause greater anxiety — like debt.
How much debt? The same study found that the debt levels of about one-third of Americans have increased over the last six months. And 74% of those with debt estimate that they owe over $10,000.
Don’t let your spending habits harm your financial situation
If you’re finding yourself overspending as a way to cope with the state of the world, you’re not alone. But it’s essential to consider how your spending habits impact your finances. If you find yourself making more frequent unnecessary purchases, it could quickly become a problem.
The last thing you want to do is rack up expensive credit card debt. Credit card interest is costly, so carrying a balance on your cards is not recommended. You should only charge your credit cards for what you can afford and then pay your balance off every month.
The following tips may help you curb your overspending:
Monitor your spending: Budgeting apps make it easier to set spending limits and monitor your spending. These tools can help you stay on track and be more aware of your financial situation, so you can change how you manage your money.
Set up roadblocks to limit online shopping: For those with an online shopping problem, making the checkout process more complicated can help limit shopping sprees. Consider deleting shopping apps from your phone and not saving your credit card details to your online shopping accounts.
Pay with cash: Credit cards are convenient, but if you struggle with overspending, you may want to tuck your cards away somewhere safe to deter you from using them. By using cash to pay for your everyday purchases instead, you’ll have more control and a better idea of how much money you’re spending.
Invest in your well-being: It may be helpful to invest in products and services that allow you to relieve your stress in a healthier way, so there’s less temptation to overspend when you’re feeling down about life. Ideas include therapy sessions, a gym membership, or a hobby that helps you relax.
Keep these tips in mind to help keep your spending in check. If you want to improve your finances in the new year, you can also check out our personal finance resources.
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