- 96% of Americans are concerned about the current state of the economy
- More than a quarter of Americans (27%) “doom spend” to cope with stress
- Nearly one third (32%) of Americans have taken on more debt in the last six months amid increased spending (27%)
Nearly every American is concerned about the current state of the economy (96%) – and it’s stressing them out about their finances.
According to a study conducted by Qualtrics on behalf of Intuit Credit Karma, the top economic concerns among Americans who are concerned about the economy include inflation (56%), the cost of living increases (50%) and unaffordable housing (23%).Of those who are concerned about the economy, nearly half (48%) say not having enough money to afford necessities like food, clothing and rent worries them the most about how a poor economy could impact them, followed by going into debt (34%) and not being able to spend money on things that bring them happiness (30%).
Younger generations are also concerned about how the current economy will impact their future job prospects and earning potential. Nearly a quarter of Gen Z respondents (23%) say they’re most worried about a lack of high paying jobs, decreasing wages (21%) and general job security (16%). Altogether, Americans are worried about their money. According to the study, two thirds of Americans say the current state of the economy gives them anxiety about their finances, with Gen Z and millennials being most likely to report feelings of financial anxiety (71%).
To cope, many Americans are doom spending (27%). For the purposes of this study, “doom spending” is defined as spending money despite concerns about the economy and foreign affairs to cope with stress. This phenomenon, most common among younger generations (35% of Gen Z and 43% of millennials), may have gone up at the same time as Americans’ concerns about the economy have gone up (64%).
In the last six months, half of Americans say their financial situation has worsened, with 42% reportedly struggling to afford enough food for themselves and/or their household and another 56% living paycheck to paycheck. Yet, more than a quarter (27%) of Americans say they’re spending more money now than they were six months ago. This was especially true among Gen Z and millennials – one-third of which (33% of Gen Z and 34% of millennials) say their spending has gone up over the last six months. This increase in spending correlates to a rise in debt among consumers.
According to the study, nearly one third (32%) of Americans’ debt level has increased over the last six months with millennials and Gen X being the most likely to report increased debt levels, 38% and 35% respectively. Of those with debt (74%), a quarter estimate they currently hold more than $10,000 in debt – a significant amount, especially amid record-high interest rates.
Doom spending may also impact Americans’ savings rate. Within the last six months, nearly half of Americans (47%) say the amount of money they’re saving has gone down. Right now, more than half of Americans (52%) estimate they have less than $2,000 in savings or none at all, which is the case for 22% of Americans.
Altogether, financial instability could be causing Americans to lose hope in the economy. According to the study, nearly a quarter (24%) of Americans are not optimistic about the economy in 2024. This was especially common among older generations; 40% of respondents aged 57 or above said they’re not optimistic about the economy in 2024, along with 28% of Gen X respondents. Of those who are optimistic, 24% say they’re hopeful inflation will level out, while others are hopeful that wages will increase (13%) and the job market will improve (12%).
“Much like doom scrolling, we’re seeing people mindlessly shop to soothe concerns about the economy and foreign affairs, which could take a toll on their financial well being,” said Courtney Alev, consumer financial advocate at Credit Karma. “If you’re feeling stressed – you’re not alone – there are things you can do to get back on track. Start by doing an assessment of your finances to understand how much money you have coming in and out each month, as well as how much debt you owe. This will help you make a plan for how you’re going to spend your money moving forward. To get in the habit of better spending, consider using cash instead of cards until you get your spending in check. That way, you can limit your chances of overspending. Also, if your card information is stored online, you might consider deleting stored card information through your browser to make shopping online less frictionless.”
Methodology:
This survey was conducted online within the United States by Qualtrics on behalf of Intuit Credit Karma between November 3, 2023 and November 9, 2023 among 1,004 adults ages 18 and older.