Young Australians facing severe housing affordability and white-collar job insecurity driven by AI are choosing to spend disposable income on daily treats instead of saving, a phenomenon examined by The Guardian.
Sydney Law Student An Tran on Why Saving Feels Futile
An Tran treats herself to experiences like concerts and movie tickets. Juggling her university studies to cover tuition costs, the 21-year-old Sydney law student notes that a large portion of her peers allocate their discretionary funds toward matcha, Labubu toys, and popular cosmetics. Tran moved from Vietnam two years ago and appreciates what she has in Australia, but she understands why her peers are concerned about the future. “We feel like we’re doomed anyway so why should we save?” she says.
Eugene Healey and the Breakdown of the Traditional Social Contract
Brand strategist Eugene Healey points to a shift in consumer behavior driven by unattainable traditional milestones. “If we believe in the future, we are much more likely to be able to defer gratification in the pursuit of it,” Healey says. “Little treat” culture emerged because affordable everyday luxuries like matcha or lunch became substitutes for major milestones that feel out of reach. Healey explains that the social contract ensuring hard work and savings lead to prosperity has broken down. “Not only are you paying into the system with superannuation, but there is no guarantee now that if you do well in school, get a relatively good job [and] accrue university debt, that you’re going to be able to enjoy … even a fraction of the prosperity that previous generations took for granted,” he says. He adds that doomspending is “perhaps a more advanced version or symptom of the same underlying feeling” where people conclude it is more rational to spend money in the present.
Cotality Research and the Reality of Capital City Housing Affordability
Buying an $8 matcha five days a week for 48 weeks totals $1,920 a year. Saving that amount starkly contrasts with the housing market, where the median house price in Australia’s combined capital cities reached $1,103,201 and the median unit price hit $738,778, according to Cotality research published this month. Saving $40 a week without buying a matcha during the workday offers little incentive when a 10% deposit remains out of reach and job security faces disruption from AI.
Housing Industry Association Data on Record Deposit Timelines
Data from the Housing Industry Association indicates that housing affordability has hit historic lows as elevated borrowing expenses have outpaced the recent cooling of property values. The average homebuyer nationally needs to save for more than eight years to secure a deposit, stretching past nine years in Sydney. Meanwhile, a report from realestate.com.au showed that a household earning $125,000 annually could afford just 12% of homes on the market, matching a historical low with the previous low watermark being 14% in 2008. Households earning $76,000 could afford only 2% of homes, while wages have barely kept up with inflation since the cost of living surged in 2022.
Terry Rawnsley and Kayshini Logeswaran on Millennial Priorities and Artificial Intelligence Pressures
Terry Rawnsley, a senior economist at KPMG, calls spending on current happiness a “perfectly rational decision” when future homeownership is unattainable. Rawnsley notes this trend extends beyond early 20-year-olds to millennials in their 30s adjusting their priorities, aided by superannuation as a financial safety net for retirement. Kayshini Logeswaran, a 28-year-old business analyst in Sydney, holds a secure and satisfactory occupation yet finds saving for major goals like overseas holidays out of reach. Logeswaran points to AI shifting roles and cost-of-living pressures as drivers of her fear for the future, making small indulgences worthwhile. “Whenever I go out or go for a walk I always make sure I get my favourite coffee: it’s something that keeps me happy and sane,” she says.
The Cambridge dictionary, which initiated its monitoring of the term in the previous year, characterizes doomspending as the act of purchasing items beyond one’s financial means to boost emotional well-being, a habit individuals sometimes turn to during periods of future-focused worry and uncertainty.
