Recent reports indicate that over 20% of Generation Z individuals have increased their spending in December 2024. This trend, described as doom spending, refers to the behavior where consumers engage in shopping as a means to find instant gratification and comfort, particularly in response to the anxiety triggered by inflation and broader economic instability. According to data from Fortune, this phenomenon has become prevalent as young consumers navigate financial pressures.

Peter Tran, a Certified Public Accountant (CPA) and personal finance expert, shared his insights on this issue while speaking to GOBankingRates. Tran noted that he has observed firsthand how stress can drive Gen Z to make impulsive purchases as a temporary escape from financial woes. Ive had clients confide that the credit card bill later hits them harder than they anticipated, leading to more anxiety; the short-lived relief isnt worth the debt they accumulate, he remarked, highlighting the psychological toll that such spending can take.

Despite the challenges posed by rising costs, Tran has also seen a shift in behavior among Gen Z consumers as they begin to adapt to inflationary pressures. Many are discovering innovative ways to manage their finances, leading to healthier spending habits over time. As inflation persists, it is becoming increasingly important for this demographic to learn how to stretch their dollars effectively. Here are some notable changes in spending habits among Gen Z, as outlined by Tran.

Traveling Locally for Shorter Periods

While travel remains a priority for many within Gen Z, there has been a noticeable shift toward shorter, more local trips as a strategy to minimize costs associated with airfare, accommodations, and dining out. Tran explains, It still offers a needed break without the high price tag. This trend reflects a growing awareness of budgeting and the necessity of finding affordable alternatives.

Shopping in Bulk to Maximize Savings

Another strategy being adopted by Gen Z is bulk purchasing at wholesale clubs. According to Tran, many young consumers are realizing that buying groceries in larger quantities can result in significant savings over time. Some clients he works with are even embracing meal prep, allowing them to maximize their investment in groceries while minimizing waste. This new approach not only helps in cutting costs but also allows for healthier eating habits.

Finding Alternatives to Paying Full Price for Clothing

In the realm of fashion, spending has seen a considerable decline among Gen Z. Rather than splurging on full-price items, many young shoppers are opting to wait for sales or explore thrift stores and consignment shops to snag better deals. Tran noted, Clothing purchases have dropped significantly in this group; many [Gen Z] shop secondhand or wait for serious discounts, not because they hate trends, but because its simply not worth paying full price under these conditions. He added that the satisfaction of seeing more money retained in their bank accounts is highly rewarding for these consumers.

Taking on Side Hustles to Make Ends Meet

To augment their incomes, many in Gen Z are turning to side gigs or part-time jobs. Tran shared the story of a client who started freelance graphic design work while also driving for ride-share services to establish an additional income stream. This proactive approach allows them to manage their finances more effectively while simultaneously gaining valuable work experience.

Spending Tips for Gen Z to Make the Most of Their Finances

As inflation continues to challenge consumers, Tran offers several practical money-saving tips designed to help Gen Z entrepreneurs maximize their financial resources. He emphasizes the importance of budgeting, prioritizing essential expenses, and seeking out opportunities for passive income. By adopting these strategies, Gen Z can navigate the economic landscape more confidently while minimizing financial risk.