SINGAPORE: Singaporean HENRYs (High Earners, Not Rich Yet), a term coined for high earners who are not wealthy yet, are increasingly resorting to doom spending to handle financial stress, reveals The Straits Times.
Doom spending is particularly noticeable among Henrys and individuals in their 40s, like Joe (alias), who felt the weight of financial responsibilities bearing down on him upon learning he would be a father.
With an unstable job adding to his anxiety, Joe resorted to shopping—a common manifestation of doom spending.
Stephanie Chiaw, an associate director at PhillipCapital, highlighted the prevalence of this behaviour, noting that individuals turn to impulse spending as a distraction during periods of economic strain and financial hardship.
This pattern, she cautioned, not only jeopardises one’s financial well-being but also exacerbates the underlying stressors.
According to Ms Chiaw, doom spending includes various forms of emotional splurging, ranging from retail therapy to address personal setbacks like breakups to indulging in luxury purchases to alleviate concerns about broader economic and geopolitical uncertainties such as climate change and global conflicts.
Driven by instant gratification, many Henrys, especially those in sectors like media and advertising, accumulate hefty credit card bills, often ranging from S$20,000 to S$30,000 monthly, as they lavish on cars, dining, travel, and special occasions.
Lendela, a Singapore-based digital loan matchmaking platform, reported a significant uptick in lifestyle-related loan applications, which now account for one in five requests.
Bryan Tay, Lendela’s Singapore country manager, emphasised the 60% surge in these loans over the past two years, coinciding with a pessimistic global economic climate.
The rise of social media and buy-now-pay-later schemes further fuels this spending spree, with individuals like Joe succumbing to societal pressures amplified by personalised content algorithms that perpetuate a sense of need for luxury goods and experiences.
Doom spending, often seen among those who have more than ten credit cards, results in many accumulating debt for temporary happiness.
The fear of never achieving traditional markers of success, such as homeownership or financial stability, drives Henrys to seek solace in material possessions, even if it means compromising long-term economic well-being.
How to avoid doom spending when stressed
To tackle these financial challenges effectively, here are some practical tips from experts:
- Control your emotions when spending money.
- Borrow wisely, ensuring loans fit into your overall financial plan.
- Before borrowing, carefully consider your income stability, debts, and long-term goals.
- Make sure loan repayments are manageable by maintaining emergency savings, regular saving habits, investments, and insurance.
- Pay off your credit card debt completely to avoid accumulating high-interest charges.
- Remember that unpaid credit card balances can quickly snowball due to compounding interest.
- Seek help if you’re struggling with overspending, and surround yourself with supportive people.
- Plan your spending wisely and avoid impulse purchases, especially if you’re using money you don’t have.
- Be mindful that overspending can lead to significant debts that hinder your ability to save for the future, including retirement.
While some Singaporeans online justify their spending with a “live for today” mentality, with one stating, “Just spend; tomorrow may not come.
Don’t spend, your money will definitely depreciate,” and another added, “Thats how I justify luxury purchase. If I don’t buy now, they will keep raising the price higher.”
Others question if “inflation and shrinkflation are actually making us spend more and save less?”
To stay financially secure, remember, unchecked doom spending is risky. It’s crucial to spend wisely. /TISG
Read also: What is doomscrolling and how to cope with it?