Gen Zers are more resistant to ‘doom spending’ than you’d think

If you’re a millennial, chances are you’re more than familiar with the avocado toast theory: the idea that spending frivolously on unnecessary products is the true barrier to financial freedom.

Cleo, an AI-based finance app, surveyed its Gen Z users as part of its AI and Money Report to find out whether that’s the case and, in short, it turns out not to be.

• Nearly 4 in 5 Gen Zers said they’ve actively adapted their spending as a result of inflation over the past two years.
• But this kind of fiscal responsibility, for some, isn’t just a product of the last two years: 30% of Zoomers, those aged 16-27, said they are saving or have saved prior to adulthood.

Cleo defines “doom spending” as spending a lot of money as a means of dealing with economic or financial stress. It also lays out “soft saving,” the idea of allocating more money to the present day, as opposed to prioritizing funds needed for the future.

• However, most Gen Zers don’t necessarily buy that. Four in 5 respondents said doom spending and soft saving don’t accurately represent their financial habits, with 41% saying they don’t identify with doom spending all.

“Despite the existing rhetoric around Gen Z, our new AI and Money Report reveals a promising trend that young adults are taking control of their finances earlier than ever, even with the current economic climate squeezing their wallets,” Roxanne Nejad, Cleo’s spokesperson, said in a statement.