According to Fortune, financial behavior expert Morgan Housel argues that Gen Z’s so-called “doom spending” is actually completely normal behavior for young people. The bestselling author of “The Psychology of Money” says status-driven purchases often fill a void when people lack other achievements to be proud of. Housel himself admits wanting a Ferrari and mansion in his 20s because he “had nothing else to offer the world.” Even billionaire Lucy Guo, founder of Scale AI, confesses to wasting money before finding success, noting that many millionaires overspend on designer items to compensate for insecurity. Housel’s new book “The Art of Spending Money” explores how spending becomes an art rather than a science, with material purchases often diminishing as people find real purpose through relationships and family.
The Real Story Behind Flashy Spending
Here’s the thing – every generation judges the next one for their spending habits. But Housel makes a pretty compelling case that this isn’t some new, irresponsible “doom spending” phenomenon. It’s basically human nature when you’re young and trying to establish your identity. I mean, think about it – when you’re 22 and working an entry-level job, what else do you have to show off besides that new iPhone or concert tickets?
And let’s be honest, Gen Z has it tougher in some ways. The traditional milestones like buying a house or starting a family feel increasingly out of reach for many. So spending $200 on a Taylor Swift ticket or waiting in line for a Starbucks cup becomes a more accessible form of status and enjoyment. It’s not that different from previous generations buying expensive stereo systems or designer jeans – the products change, but the psychology remains the same.
When Material Desires Fade
What’s really interesting is Housel’s point about how material aspirations diminish as people find real purpose. He says his own desire for flashy stuff became “the inverse of what else I have to offer the world.” Once he became a dad and husband, those became his sources of pride and respect. The Ferrari just didn’t matter as much anymore.
This tracks with what we see among truly successful people too. Lucy Guo still drives a Honda Civic despite being a billionaire. Warren Buffett lives in the same modest house he bought decades ago. When you’re actually accomplished, you don’t need the external validation from luxury items. The people who are flashy with money are often the ones who feel they have something to prove.
Spending as Art, Not Science
Housel’s perspective that spending is an art rather than a science feels refreshing in our data-obsessed world. There’s no perfect formula that works for everyone. Your spending should reflect your values and stage of life. The problem isn’t spending money – it’s when the majority of your expenditures go toward material items that provide temporary satisfaction rather than lasting value.
So maybe we should cut Gen Z some slack. They’re navigating an expensive world with fewer traditional paths to success. A little “irresponsible” spending might just be part of figuring out what really matters. And honestly, isn’t that what being young is supposed to be about?
