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YOLO Economics: Splurging in a Shrinking World
Today, we're diving into the wild world of our extraordinary economy, and when I say extraordinary, I mean it’s a rollercoaster ride you won’t want to miss! We’re breaking down how a surprising number of folks are choosing to cut back on essentials like groceries just so they can splurge on experiences—concerts, events, you name it. It’s a head-scratcher, right? We'll explore the concept of "doom spending," where people feel like there's no hope for their financial futures, so why not live it up while they can? From Taylor Swift tickets to dining out, we’re chatting about the strange financial choices people are making and what this means for our future. So grab a snack (maybe something generic) and let’s slow down the news together! James A. Brown kicks things off with a bang, diving deep into the current economic climate and what he describes as an 'extraordinary economy.' Now, before you think that’s a compliment, let me clarify: 'extraordinary' doesn't mean 'awesome' here. Instead, it’s a euphemism for the bizarre and unusual financial behaviors that are emerging among Americans. You know, the ones that make you scratch your head and wonder if we’re all a little bit bonkers? For instance, while 83% of folks say they're trying to save money, a whopping 1/3 of them are trading down on essentials just to afford those concert tickets—cue the Taylor Swift and Drake fandoms! James explores how this peculiar trend, dubbed 'doom spending,' is reshaping our understanding of financial priorities. It’s not just about living in the moment; it’s about feeling like the future is so bleak that splurging on experiences feels justified, even if it means skipping out on basic necessities. The discussion is both humorous and sobering, making you laugh while you ponder the implications of this collective spending spree.
Takeaways:
- In today's fast-paced world, taking a moment to slow down is crucial, or else you'll miss the important stuff happening around us.
- James A. Brown's perspective on the extraordinary nature of our economy challenges us to ask deeper questions about financial realities.
- Many Americans are cutting back on essential items to prioritize experiences, which reflects a shift in values despite economic pressures.
- Doom spending is a term that captures the mindset of young adults who feel hopeless about their financial futures and choose immediate pleasures over savings.
Links referenced in this episode:
Companies mentioned in this episode:
- McKinsey
- Harris
- Veracast
- Bank of America
- Price WaterhouseCooper
Transcript
News moves pretty fast, and if you don't stop and look around once in a while, you'll miss it.
Speaker A:That's why James A.
Speaker A:Brown slows down the news to ask better questions about America.
Speaker A:No bumper stickers, no teams, no masters.
Speaker A:It's the Weekly Note with James A.
Speaker A:Brown.
Speaker B:Hello and welcome to the Weekly Note.
Speaker B:I'm James A.
Speaker B:Brown.
Speaker B:Thanks for joining me.
Speaker B:You could be anywhere in the world, but you're here with me and I thank you for that, sincerely.
Speaker B:This week's episode is all about what's going on in our extraordinary economy at this moment in time.
Speaker B:And when I say extraordinary, I mean extraordinary.
Speaker B:I can't wait to get into it with you, as we will in a minute or so.
Speaker A:This is the Weekly Note, slowing down the news.
Speaker B:Foreign.
Speaker B:Hello and welcome to the Weekly Note.
Speaker B:I'm James A.
Speaker B:Brown.
Speaker B:You check out my work@jamesabrown.net let me know your thoughts.
Speaker B:Send me a text or leave me a voicemail.
Speaker B: -: Speaker B:We might have you on the show.
Speaker B:So we start with our top line.
Speaker A:The top line.
Speaker B:The top line is the word extraordinary.
Speaker B:When I think of our economy right now, I think of the word extraordinary.
Speaker B:And when I use the word extraordinary and the phrase extraordinary economy, people tend to think that it's a positive and that I'm crazy.
Speaker B:I don't see what's going on.
Speaker B:Well, I definitely see what's going on and I still use it.
Speaker B:Extraordinary.
Speaker B:I think what happens with that word is that people misunderstand the meaning of it.
Speaker B:The word extraordinary means very unusual or remarkable beyond what is ordinary or usual.
Speaker B:We've come to use extraordinary as a compliment.
Speaker B:An extraordinary meal, an extraordinary performance.
Speaker B:But that's not what it means.
Speaker B:It means outside of the ordinary, extraordinary, strange, unusual, not normal.
Speaker B:What's happening in our economy right now is extraordinary.
Speaker B:None the expert.
Speaker B:Not in the inspirational sense, but in the literal one.
Speaker B:People are cutting back on groceries so they can afford concert tickets.
Speaker B:An entire generation is deciding that saving for a house is pointless.
Speaker B:But Taylor Swift tickets are worth going into debt for.
Speaker B:You know, buy now, pay later.
Speaker B:83% of Americans say they're prioritizing saving, while 1/3 deliberately trade down on necessities.
Speaker B:You know, soap, cereal.
Speaker B:We'll get to that in a bit.
Speaker B:So they can.
Speaker B:So they can splurge on experiences.
Speaker B:This isn't normal.
Speaker B:It's extraordinary.
Speaker B:And I think it's time we start, you know, digging into that.
Speaker B:If you're like me at all, you probably have store brand cereal in your pantry, if you have one.
Speaker B:But some people, they.
Speaker B:They want to go out and they want to have a good time.
Speaker B:They want to see Drake, they want to see J. Cole, they want to see Taylor Swift, they want to go see a big football game.
Speaker B:I'm a huge Buffalo Bills fan.
Speaker B:I would love to go see them in the playoffs in Denver.
Speaker B:That's really expensive.
Speaker B:You know what it's like to scale down on certain things so you can barely afford the things you want to do.
Speaker B:We clip coupons for groceries.
Speaker B:We pack lunches instead of buying them.
Speaker B:We cancel the streaming services we don't use.
Speaker B:Then we drop 400 bucks on whatever that big thing you can't resist on a credit card.
Speaker B:And if someone called us out on it, we'd have an answer ready.
Speaker B:We'd say something like, we've been saving up for this.
Speaker B:It's been a rough year.
Speaker B:We deserve this.
Speaker B:Or my personal favorite, yolo.
Speaker B:You only live once.
Speaker B:But here's the thing here.
Speaker B:It's not just us.
Speaker B:It's not just people making questionable financial decisions.
Speaker B:According to a Harris poll from last year, 83% of Americans say saving money is a bigger priority than ever before.
Speaker B:83% of us, that's nearly the entire country.
Speaker B:81% of us say they're specifically cutting down on food to make it happen.
Speaker B:So we've got a country full of people who are pinching pennies at the grocery store.
Speaker B:And yet this is the most interesting thing I found in my research.
Speaker B:According to McKenzie, you know, the big consulting firm, their research says that 1/3, 1 in 3 of their consumers are deliberately trading down on some categories specifically so they can splurge on others.
Speaker B:So.
Speaker B:So I. I find this extremely troubling and quite strange.
Speaker B:We are trying to save money so that we could spend recklessly.
Speaker B:Think about that logic there.
Speaker B:Does that fail anybody else?
Speaker B:McKinsey's data back this up.
Speaker B:They have the state of the consumer that they release every year.
Speaker B:They say that 75% of consumers have traded down at least once in at least one spending category over the past year.
Speaker B:That's three out of four of us.
Speaker B:Three out of four of everyone.
Speaker B:You know, think about it.
Speaker B:You're in your house or your apartment, and you look at the person across the street and the person next to them and the person next to you.
Speaker B:That three out of the four of us have decided that we're going to slim down because we think that our salaries, our incomes can handle the weight of the financial situation in America today.
Speaker B:It's something that is talked about here or there in politics, but I don't think it's happening nearly, nearly enough.
Speaker B:I don't think this is a big enough issue.
Speaker B:I don't think it's spoken about enough.
Speaker B:I know President Trump has talked some about bringing prices down, but how, but how?
Speaker B:And not nearly enough.
Speaker B:It hasn't been the priority in the moment.
Speaker B:The Democrats seem not to care at all either.
Speaker B:They're prioritizing spending.
Speaker B:There's some logic to that.
Speaker B:I mean, if you think about it, the social safety net, that is more spending, that is taking care of us and we rough circumstances.
Speaker B:But what it also does, it also keeps the spending flowing, keeps the money flowing.
Speaker B:It keeps things the same.
Speaker B:It forces, it doesn't force us to make the hard decisions that we need to make about how we live our lives, about how we manage things, how we save.
Speaker B:Tough questions that we need to make.
Speaker B:This is the Weekly Note.
Speaker B:What are your thoughts on this?
Speaker B: -: Speaker A:Slowing down the.
Speaker B:Hello.
Speaker B:Welcome back to THE Weekly Note.
Speaker B:I'm James A.
Speaker B:Brown.
Speaker B:You can check out my work@jamesabrown.net that's jamesabrown.net.
Speaker B:You know, I've been talking about our financial circumstances as a nation, everything that we've been going through, the choices that we're making, some wise, some foolishness.
Speaker B:I just talked about a McKinsey survey that said that three out of four of us are cutting back.
Speaker B:Well, that's not the only one that points at that direction.
Speaker B:There's a Harris poll found that 89% of Americans believe that cooking at home is the best way to save money.
Speaker B:And they're acting on it.
Speaker B:68% of us, according to Veracast's restaurant trend March Twin Watch now forego restaurant meals altogether.
Speaker B:That's more than two thirds of the country choosing their kitchen over a restaurant.
Speaker B:Now, there are all sorts of ripple effects of this choice when you choose to eat at home, and not all negative.
Speaker B:When you choose to eat at home, it does save money.
Speaker B:And that's certainly what we're trying to do in this circumstance.
Speaker B:But it also means that those small businesses, those that, you know, whether they have five employees, two employees or 50, well, they're not doing as well.
Speaker B:So what's happened is that restaurant, and I am truly since the pandemic, going out to restaurants has sort of become a sacrifice.
Speaker B:And It's a double edged sword.
Speaker B:Well, I'd say three edged sword if I, if I'm being honest.
Speaker B:It's not just that we are trying to save money because the cost of everything is higher.
Speaker B:The cost of everything at the restaurant is higher in part because we're not going.
Speaker B:In part, their supplies are actually higher as well.
Speaker B:If you're not getting as many customers, your costs are the same or higher so you raise your costs to match that problem.
Speaker B:It's a rough problem.
Speaker B:And if these restaurants, these businesses struggle, they're not paying sales taxes and that's not going into our governments.
Speaker B:So our governments are paying less, giving back less, taking in less.
Speaker B:So what's happened here is this mounting problem on every side.
Speaker B:Bank of America has more on this.
Speaker B:They found that Gen Z, they're spending even less than the rest of us on these things, on food, on going out, eating.
Speaker B:But at the same time their discretionary in entertainment and travel spending is up 25% year over year.
Speaker B: We're talking in: Speaker B:You know that jargon that we hear all the time.
Speaker B:No, no, no, no, no.
Speaker B:They're spending more on experiences.
Speaker B:Emerge's event Effect found that 86% of Gen Z, the younger people in our workforces exceed their budget at these events.
Speaker B:So you are going to, to, let's say, I don't know, Bad Bunny.
Speaker B:You are more willing to throw the kitchen sink at going to see Bad Bunny while you're scraping at home.
Speaker B:I guess that that balances it out, right?
Speaker B:You know, because you have to cut, you have to pull back somewhere, don't you think?
Speaker B:86% of them, it's not a few people going, you know, to the concert and getting carried away.
Speaker B:That's just about everybody there.
Speaker B:They're not accidentally overspending, they're choosing to.
Speaker B:And this is where this gets even more interesting.
Speaker B: king at the fourth quarter of: Speaker B:Think about that logic.
Speaker B:You're going to cut your spending on your friends and family, but increase spending on going on a cruise or going to Coachella or going abroad.
Speaker B:I guess it's not totally insane, but it doesn't seem all that logical to me either.
Speaker B:What do you think?
Speaker B:I mean, are they making the right move here?
Speaker B:Is it smart?
Speaker B:I struggle with this kind of logic, with the fact that they're choosing to short dinner and their family and friends, but throwing all sorts of money at big events.
Speaker B:Doesn't make a whole lot of sense to me.
Speaker B:Does it make sense to you?
Speaker B:Let me know.
Speaker B: -: Speaker B:More in a moment.
Speaker A:Slowing down the news.
Speaker B:Hello and welcome back to THE Weekly Note.
Speaker B:I'm James A.
Speaker B:Brown.
Speaker B:Thanks for joining me.
Speaker B:You can check out my work@jamesabrown.net, or thedailynote.net you can send me a text or leave me a voicemail.
Speaker B: -: Speaker B:We might have you on the show.
Speaker B: eCooper's holiday outlook for: Speaker B:Last year, just a few weeks ago, they found that Gen Z cut their holiday budgets by 23% year over year.
Speaker B:It's the biggest reduction of any generation.
Speaker B:They're spending on less on gifts for their families and friends than boomers, millennials, Gen X, everybody.
Speaker B:They're tightening the belts on Christmas while boomers are spending like crazy.
Speaker B:And what, what is Gen Z spending their money on?
Speaker B:Concert tickets, big events.
Speaker B:And, you know, I don't know that it's necessarily the, the worst thing they could do, I suppose, but it is a strange one, don't you think?
Speaker B:It's a very yolo kind of decision.
Speaker B:You know, you only live once, that if you are making less, if the economy is crunching at you, hey, you might as well enjoy your time.
Speaker B:You might as well have a great time.
Speaker B:You might as well just have these experiences.
Speaker B:So what do we call this?
Speaker B:McKinsey calls it a, quote, cross category trade down.
Speaker B:The financial press calls it a smart discretionary decision, pinching pennies on Monday and splurging on Friday.
Speaker B:They call it a strategic sacrifice.
Speaker B:That one, that, that feels a bit more honest to me because what's actually happening is that people aren't just being irresponsible, they're being strategically irresponsible.
Speaker B:They're not worrying about their bills.
Speaker B:In fact, they're mounting their bills while they are, you know, just skimping and trying to eke their way through the day.
Speaker B:You know, I can't demand that people spend their money more responsibly, but what I can do is, you know, try to understand.
Speaker B:I'm trying not to judge it myself.
Speaker B:And I do think part of this is a lack of understanding of money and how to manage it.
Speaker B:At the same time, I think it's important to try to Understand where the logic is coming from.
Speaker B:You know, if you think you can't afford a house, and I mean genuinely, you can't afford one, not it would be hard.
Speaker B:But literally the math does not work for you.
Speaker B:Meaning you, you make too little to afford a house if you think that retirement isn't going to actually happen.
Speaker B:It's a fantasy.
Speaker B:If every protection of your financial future looks worse than the present, why not yolo?
Speaker B:Why not just enjoy the concert ticket?
Speaker B:Why not just rock out with Taylor Swift?
Speaker B:I'm asking that seriously, what's the alternative?
Speaker B:You save that $200 or that $2,000, you put it in a savings account earning 4% if you're lucky, and you watch inflation eat at you like it's eating at everybody around us, and you're still, still nowhere, nowhere close to a down payment on a house in most of this country.
Speaker B:You have moved in lido at all.
Speaker B:So I can see, considering all that, why someone might feel hopeless.
Speaker B:Why someone might be willing to make decisions that seem reckless on the face and no, not seem, they are, Or seem strange at least and throw all kinds of money at having a lavish life.
Speaker B:Which brings me to something that I was reading about over the last few years.
Speaker B:It's called doom spending.
Speaker B:Now let's think about that phrase doom spending.
Speaker B:We'll go into it a little bit deeper after our break.
Speaker B:But doom spending, just, just those two words sort of being sandwiched together.
Speaker B:This, this phrase is coming out of the financial industry.
Speaker B:They, they, they've been enjoying the fruits of this, all this doom spending.
Speaker B:It describes consumers who believe that financial future is unlikely to improve.
Speaker B:So hey yolo, If you're out of options, Why not just, you know, enjoy yourself?
Speaker B:We'll go on a doom spin.
Speaker B:Spending a little bit more in a bit.
Speaker B:But what do you think?
Speaker B:Are you a doom spender?
Speaker B:Let me know amesabrown.net you can email me at James at the Daily Note or send me a text or leave me a voicemail.
Speaker B: -: Speaker B:This is the Weekly Note.
Speaker B:I'm James A.
Speaker A:Brown, slowing down the news.
Speaker B:Hello and welcome to the Weekly Note.
Speaker B:I'm James A.
Speaker B:Brown.
Speaker B:Thanks for joining me.
Speaker B:We were just talking about a phrase that's come up in the financial press over the last few years.
Speaker B:It's called doom.
Speaker B:This is a phrase that they claim, they claim is huge among Gen Z.
Speaker B:Well, not so much a phrase, but it a way of being.
Speaker B:And when I say way of being, I mean a way of going about Your life.
Speaker B:So let's take a walk in their shoes.
Speaker B:If you look at your 401k and you look at your parents and what they have and what they spend to live their lives in their 60s, 70s, 80s.
Speaker B:If you look at your bank account and you're like, oh, I have to spend every dime just to get through the week or the, you know, the pay period.
Speaker B:If you look at your savings account and you're like, man, I try to stock away something but it's never enough.
Speaker B:If you look at the cost of housing in your area and you're like, man, how am I going to ever afford to have a house?
Speaker B:How am I going to afford to have kids?
Speaker B:How am I ever going to pay off my car loan?
Speaker B:I say that as a person who at now 41, just paid off my first car.
Speaker B:I've owned used cars, but this was a car loan that over several years that I actually paid off.
Speaker B:It was the first time in my life for someone in Gen Z, someone younger, let's say someone in their 20s.
Speaker B:It's even harder than someone my age, Someone who's like, man, I'm going through my life and I'm like, I don't think I can afford anything, Well, not anything substantial to purchase any major asset at all, like a home.
Speaker B:What am I supposed to do?
Speaker B:Sock away everything and put it in a savings account and hope that inflation doesn't eat it all away?
Speaker B:If you look at your salary and you look at the person who's a step above you at your office or your job and you're like, man, even if I get that next step, that next step's not going to be enough for me to buy a house wherever I live or, or buy a condo or an apartment or whatever.
Speaker B:Why not yolo?
Speaker B:Why not spend the money that you have socked away on Taylor Swift, on Drake, on Bad Bunny, on whoever, on Disney?
Speaker B:It's about experiences.
Speaker B:While this is no doubt reckless behavior, it is something that the financial press has begun calling doom spending.
Speaker B:They call it prioritizing immediate pleasures over long term savings.
Speaker B:It sounds like an accusation and it is.
Speaker B:It's irresponsible, dressed up like jargon.
Speaker B:And it's definitely something that any financial advisor, you know, your Dave Ramsey's of the world would like.
Speaker B:Oh my God.
Speaker B:But do they have a point?
Speaker B:Well, somewhat.
Speaker B:I wouldn't say it's the best point in the world, but they do have some.
Speaker B:Some.
Speaker B:There is some logic to this kind of behavior.
Speaker B:So let's break down the pieces of here.
Speaker B:This you know, let's, let's, let's look at the thing that most of us want.
Speaker B:They want to own a home.
Speaker B:It's the American dream, traditionally.
Speaker B:Now I'm fortunate.
Speaker B:I live in Rochester, New York.
Speaker B:In Rochester, you can buy a home.
Speaker B:You know, I live in the city of Rochester, and you could buy a home there for 120, 130, 140,000.
Speaker B:If you go out to the burbs around where I live, you could buy a house.
Speaker B:You're probably in a 200,000, 300,000.
Speaker B:But that's below the national level.
Speaker B:Now, if you look at Zillow, Zillow says $400,000.
Speaker B:It takes $400,000 thousand dollars in order to buy a house.
Speaker B:A median house in America.
Speaker B:Now, median, it's, it gets a little squirrely because we talk about averages.
Speaker B:We're, we're, we're, we're including Will Smith's house in my house.
Speaker B:Those are, those are very, very different houses.
Speaker B:But it does give you a sense of where we are nationally, even if that's off a little.
Speaker B:I mean, could you come up with a down payment for $400,000?
Speaker B:Could you come up with a down payment for 300,000?
Speaker B:Especially when you're a youngin and we're in the midst of a housing crunch, we don't have enough houses for everybody.
Speaker B:There's a rule of thumb in real estate that says you shouldn't buy a house that costs more than three times your annual income.
Speaker B:That's the conventional wisdom.
Speaker B:400,000.
Speaker B:That's five times the average national income.
Speaker B:We've been in a crisis when it comes to trying to own a home for since I got out of College.
Speaker B:I graduated in 06, And it hasn't gotten better.
Speaker B:It just gets worse and worse and worse.
Speaker B:For most young Americans, home ownership isn't just difficult, it's mathematically absurd.
Speaker B:Many people would need a 40% raise.
Speaker B:40% just to get to the affordability levels that our parents had.20% to get to the affordability, affordability levels that I've had and most of us that ain't happening.
Speaker B:And that's not all of it.
Speaker B:I mean, look at retirement.
Speaker B:That one's tough because at least with housing, you can see what you're not getting with retirement.
Speaker B:It's all projections and speculation in hopes that the market, which seems overheated doesn't blow up before you're 64.
Speaker B:If we're lucky, if the retirement rate doesn't go up to 68 or 70, this, we will go to The Federal Reserve, they found that 43% of non retired adults have no retirement savings at all.
Speaker B:Zero, nothing put away.
Speaker B:That's almost half of working Americans with nothing between them and working until they die.
Speaker B:And among those who do save the median, this is an average, of course, balance for household.
Speaker B:For households between 55 and 64 people who should be finishing their savings for retirement, not starting it is around $134,000, which sounds like a lot until you do the math.
Speaker B:I say this as a person with an elderly mom.
Speaker B:When you have to deal with things like nursing home, you have to deal with things like health care.
Speaker B:$134,000 ain't much.
Speaker B:If you follow the standard 4% withdrawal rule, meaning you shouldn't pull out more than 4% a year.
Speaker B:That's roughly enough to generate, I don't know, 6,000 a year.
Speaker B:How many people you know could live off 6,000 a year?
Speaker B:I certainly couldn't.
Speaker B:Then you think about things like Social Security.
Speaker B:You know, you could, you could begin to, you could begin to cover that gap, but you're definitely not going to totally get across the Rubicon.
Speaker B:So if you do a solo assessment of all this, I mean, I could totally see someone deciding, man, Man, this one's rough.
Speaker B:What do you think?
Speaker B:Let me know on jamesabrown.net or email me at james the dailynote.net this is the Weekly Note.
Speaker B:I'm James A.
Speaker B:Brown.
Speaker A:More in a moment, slowing down the news.
Speaker B:Hello and welcome to the Weekly Note.
Speaker B:Welcome back.
Speaker B:Thanks for being with me.
Speaker B:There are three ways to get in touch with me.
Speaker B: -: Speaker B:We might have you on the show.
Speaker B:So we were just talking about the reality, the financial reality for young people and how and why they resort to things like doom spending.
Speaker B:So what's doom spending?
Speaker B:If you didn't hear me, doom spending is feeling that your financial future is so uncertain, so out of reach that you're just going to, you're going to spend on big ticket items and not worry about saving at all.
Speaker B:Now, this is a poor decision, but there's some logic to it.
Speaker B:I was just walking through the reality of buying a home in America and the math of retirement and both look bleak.
Speaker B:Not just for them.
Speaker B:Hell, for me, I'm 41.
Speaker B:I'm not a Gen zer.
Speaker B:But.
Speaker B:So I can understand the logic behind saying, man, what the hell?
Speaker B:Why invest?
Speaker B:Why sock away every dime on something that I know I can't reach?
Speaker B:A summit I can't get to.
Speaker B:Why not try to experience the highs of life?
Speaker B:Now, this is not the best decision making, as I said, but it is.
Speaker B:It is.
Speaker B:It's not as crazy as you might think.
Speaker B:So if housing is next to impossible to acquire for Gen Z and retirement feels like a fantasy, there's even more to this.
Speaker B:And when you look at the research, this one surprised me quite a bit.
Speaker B:Social Pressure Empower research found that 37% of Americans felt pressure to go outside their budget to travel with their friends.
Speaker B:37% of people feel like they have to overspend just to maintain those relationships with their friends.
Speaker B:This would have flabbergasted me like I've never.
Speaker B:Maybe I'm just a weirdo here, but that's not something that I have ever really felt.
Speaker B:You know, there were times where I wanted to go and do road trips and I couldn't afford it, so I didn't, But I didn't feel guilty about it.
Speaker B:I.
Speaker B:But maybe I'm, I'm just a weirdo because among Gen Z, that number jumps to 47%.
Speaker B:That's one in two.
Speaker B:And among my generation, the millennials, that's more than 50%, 52%.
Speaker B:Traveling with friends, going places you can't afford has become social currency.
Speaker B:Not just going to the concert to, you know, to experience the music and the, the, the experience to take the Instagram photos, but trying to prove to your friends that you can.
Speaker B:I, you know, look, I have to be honest about this one.
Speaker B:There is, I've felt some of this, but never to the extent of spending thousands of dollars.
Speaker B:You know, there's certainly, you know, I think of, you know, many times where I went out to drink or went out to hang out with friends just because I wanted to be a part of the club.
Speaker B:I wanted to be among them.
Speaker B:But I, but I don't think I've ever spent thousands of dollars so that I could be like my friends, so I could have, so I could spend time with my friends.
Speaker B:That feels extreme, you know, extreme fomo fear of missing out.
Speaker B:I've never had that.
Speaker B:You know, I never felt that drive to make memories to that extreme.
Speaker B:I always felt that you could make memories without trying to, without overspending within, overstretching yourself.
Speaker B:But these folks, they feel that much of their social life is wrapped around shared experiences with their friends that the girls trip to the tropical location, the boys trip to the big football game.
Speaker B:And I understand some of that, but it feels, It feels like a trap.
Speaker B:It feels like something that is, is entirely honestly disturbing.
Speaker B:Have you felt this?
Speaker B:Do you feel FOMO?
Speaker B: -: Speaker B:We might have you on the show so let us know who your name and where you're from.
Speaker B:So there's psychology underneath all of this doom spending that we've been talking about.
Speaker B:If you can't afford the traditional markers of adulthood, a house, a stable career that you think is actually going to take you somewhere, I could see.
Speaker B:You not wanting to.
Speaker B:Invest in something that's not going to give you back.
Speaker B:Attending that concert becomes more valuable precisely because housing feels impossible.
Speaker B:The trip matters more to you because your 401k feels pointless.
Speaker B:That's why people doom spend splurging starts to make sense because, well, What else can you do?
Speaker B:This is the weekly note.
Speaker B:I'm james a.
Speaker B:Brown.
Speaker B:More in a moment.
Speaker A:Slowing down the news.
Speaker B:Sa.
Speaker B:Hello, welcome to the Weekly Note.
Speaker B:I'm James A.
Speaker B:Brown.
Speaker B:Thanks for joining me.
Speaker B:You can check out my work@jamesabrown.net let me know what you think about it.
Speaker B:Contact me on jamesabrown.net and leave a comment.
Speaker B: -: Speaker B:We might have you on the show.
Speaker B:So I've been talking about the spending habits of Gen Z and a cache of data that's been out in the last few months about it.
Speaker B:How many of them?
Speaker B:Not just them, but many of them, you know, doom spill.
Speaker B:They don't believe they have much of a financial future.
Speaker B:They don't think that they could acquire things like housing like owning a house.
Speaker B:They don't believe their retirements will, their retirement savings could ever reach the levels that they need it to.
Speaker B:So they're be, they'll be frugal.
Speaker B:They'll skip, you know, dining out and then spend all that money on concert tickets or big experiences outside.
Speaker B:And I walked you through some of the realities of buying these big things and taking care of yourself in the long run.
Speaker B:And these are things that I am concerned about as well.
Speaker B:And what worries me about this isn't just whether this is irresponsible or not is if they're right.
Speaker B:What if they're right?
Speaker B:If you genuinely believe in the math supports this belief that you'll never own a home anyway.
Speaker B:Why would you spend that down.
Speaker B:Why, why wouldn't you spend the down payment on something that gives you joy?
Speaker B:If you don't think that you'll ever make enough to support yourself, what exactly support that dream?
Speaker B:That is, what exactly are you saving for?
Speaker B:It's not about discipline.
Speaker B:It's not just about or just about discipline.
Speaker B:It's not just about financial literacy and you know, the personal finance industry wants it to be.
Speaker B:It's not just about avocado toast and lattes and whatever boomers are blaming this week.
Speaker B:This is about people who look at the situation that they're in and feel that they can never ever get over.
Speaker B:That brings me to the question that honestly started the logic behind this episode overall.
Speaker B:Is this smart coping?
Speaker B:Is this people making the best of a bad situation?
Speaker B:Or have we quietly accepted something we should never have accepted in the first place?
Speaker B:That the American dream is just that, it's a dream.
Speaker B:You know, McKinsey, the consulting firm, their consumer research includes a line that stuck with me.
Speaker B:I probably read it a dozen times now and every time I think about it a little bit differently.
Speaker B:And I wonder what you think about this.
Speaker B:They wrote what once seemed like a short term adaptation from the COVID 19 pandemic has been solidified into a lasting behavioral change.
Speaker B:Solidified into a lasting behavioral change.
Speaker B:What they're trying to say there, and they're careful corporate jargon, is that this isn't a phase, this isn't pandemic recovery spending because we've been locked up into House and we're tired of Netflix and we want to just have a good time.
Speaker B: ing themselves Treat yourself: Speaker B:This is permanent.
Speaker B:They think this is the new normal.
Speaker B:They think that this is how we live now.
Speaker B:And once I started thinking about it as a permanent condition, I stopped thinking that man, maybe we'll go back to normal.
Speaker B:Instead, I started to think maybe it was never normal.
Speaker B:Here's what we don't talk about when we talk about splurging and saving and whether we should do what this doom spending or not, that all this looks the same whether you have savings or not, Whether you're buying a generic cereal so you could go to the Taylor Swift concert.
Speaker B:It looks identical from the outside.
Speaker B:It doesn't feel the same, but it doesn't and it doesn't carry the same risk.
Speaker B:But for someone with a safety net, you know, with expenses, you know, a big savings account or a retirement account growing in the background, maybe some family money buying generic cereal so they can afford vacation, it's a choice.
Speaker B:It's prioritization.
Speaker B:It's saying that I'd rather have an experience than a brand name.
Speaker B:It's, that's fine.
Speaker B:That's actually kind of healthy if you think about it.
Speaker B:Experiences over stuff.
Speaker B:But for someone who feels that, like, man, the system screwed me, that I actually don't have an option, that I am, I'm never going to make up the amount of retirement money that I need.
Speaker B:I'm never going to be able to afford a home for them to say, hey, screw it, screw saving, screw everything, and let's just Doomspin.
Speaker B:That's kind of scary, don't you think?
Speaker B:That's something that I don't think is going to work, not in the long term.
Speaker B:And I think that's something that we should all be concerned with.
Speaker B:So what do you think?
Speaker B:Am I making any good points here?
Speaker B:Am I wrong?
Speaker B:Tell me your thoughts.
Speaker B:There's three ways to get in Contact me.
Speaker B: -: Speaker B:We might have you on the show.
Speaker B:Thanks for being with me.
Speaker B:I'm James Brown and this is the Weekly Note.
Speaker A:Slowing down the news.
Speaker A:I'm stuck in an endless intermission.
Speaker A:Story stopped all of a sudden.
Speaker B:I.
