‘Death costs’ rise as Brits try to escape bad news | Personal Finance

A growing number of Britons are said to be engaging in “doom spending”, which involves spending money in search of joy in the face of bad political and financial news.

The rise of buy now, pay later (BNPL) financing in online stores and on the high street has encouraged instinctive and innocent purchases for those seeking an instant rush, according to a leading consumer spending expert.

At the same time, social media channels featuring influencers promoting fashion and other lifestyle products are fueling a shopping boom among aspiring consumers.

David Jinks, head of consumer research at Parcelhero, said the instant hit and relief offered by doomed spending comes with the nasty sting of debt.

He said: “Retail therapy is nothing new, but a growing concern is the rise in perishable spending, which international e-commerce analysts ECDB defines as the calming behavior of purchasing products despite personal financial stress, to relieve psychological stress. stress”.

Mr Jinks said: “The rise of social commerce is driving up the cost of death. Many of us have a habit of “rewinding”—watching endless negative news on TV. TikTok and other social networking sites, even though we end up getting depressed.

“Then it’s too easy to watch influencers promote products and snap up things we don’t really need as a temporary wellness solution. This cycle repeats itself as soon as the buying frenzy subsides.”

He said a recent Credit Karma study found that 43 percent of millennials and 35 percent of Gen Zers spend money to feel better about themselves.

Mr Jinks said: “People don’t just buy non-essential ‘nice things’ like a new pair of trainers. They are also increasingly making more expensive purchases, such as cars and vacations.

“The increasing difficulty of securing an affordable first-time mortgage has caused young people to give up on their dreams of home ownership. Instead, they spend their hard-earned savings on something more achievable, like a new car or an unforgettable experience. It’s tempting, but it’s short-term thinking.”

He warned: “Doomed spending is becoming an increasingly easy trap to fall into. Online shopping gives us that pleasure at just the click of a button, and step-by-step payment options such as Klarna and PayPal Credit make it deceptively quick and painless.

“As a result, there are concerns that social commerce is targeting users who may be particularly susceptible to self-defeating spending.

“The #TikTokMadeMeBuyIt trend, with millions of users showing off the latest items they bought through the platform and other sites, shows how popular this newest form of retail therapy has become. It also gives a false sense of security in numbers. Just because a lot of other people are spending money to get killed doesn’t mean it’s okay.”

Mr Jinks said there were steps consumers could take to take control of their purchases. This includes careful financial planning to determine how much “spare” income – if any – is available each month. Other steps include turning on bank alerts and keeping a spending log to track our purchases.

He said one of the main ways people wean themselves off burdensome spending is by physically going to a store and paying with cash rather than using a phone app or card.

“There’s something about spending ‘real’ money that makes us think twice,” he said.

Mr Jinks said: “Steps have been taken in the US to curb the vicious cycle of death costs. For example, America is introducing new legislation insisting on simple “click to cancel” subscription requirements and ending regular subscription renewals without the active consent of consumers.

“While consumers in the US and UK may suffer from similar concerns, there are many examples of differences between the UK and US in terms of consumer protection laws.”