Doom spending, or ‘catastrophic spending’, i.e. compulsive buying for immediate gratification, is having a significant impact among Generation Z and millennials.

To combat this impulse spending and improve control of their finances, 69% of 18-30 year olds are opting for cash, reducing doom spending.

This is one of the main conclusions of the 4th edition of the Study on Spaniards‘ perceptions and habits regarding the banking sector 2025, carried out by Nickel, the bank account that is opened in tobacconists’ shops and lotteries.

Cash, an ally against compulsive consumption

More than half of young people (51.7%) recognise that the use of cash helps them to reduce the temptation to spend. This trend is relevant in a context where economic uncertainty is driving Generation Z and Millennials to make impulse purchases, even without a savings cushion.

According to a report published in the journal Psychology Today, this quest for immediate gratification has become an increasingly prevalent behaviour, despite its long-term financial consequences.

Financial worries affecting mental health

The report also highlights that 22.4% of young people under the age of 30 have no savings, which increases anxiety about their financial future.

• 62% of young people fear that they will not be able to meet an unforeseen expense.
• 36.4% are anxious about not being able to buy or rent a home.
• 34.5% recognise that worrying about their finances has a negative impact on their mental health.

Monica Correia, CEO of Nickel in Spain, underlines the importance of cash as a tool to better manage personal finances: ‘Young people perceive that reaching their financial goals is increasingly difficult. Learning how to manage money is key to achieving stability at a crucial stage in their lives’.

81% of young people fear cost of living increases

Concern about inflation is another key factor in young people's relationship with money:

• 81% of young people fear the rising cost of living.
• 57% plan to reduce spending on non-essential products (clothes, technology, leisure).
• 20.7% will opt to reuse products or buy second-hand.
• 22.4% plan to take out a loan or use credit cards to meet their expenses.
• 31% consider looking for extra income, such as a second job or investments in cryptocurrencies.

Fixed expenses that compromise wages

The study also shows that 60.3% of young people spend more than 40% of their salary on fixed expenses such as rent, mortgage, insurance, telephone and internet, electricity and water. Of these, half of them spend more than half of their salary on these expenses each month.

70% of young people lack financial education

Lack of personal finance education remains a challenge. According to the study:

• 70.7% of young people do not believe they have a good financial education.
• 53.5% would have liked to receive training in personal finance at school.
• 69% want to learn about savings, investment and credit.
• 55.2% would like to better understand how mortgages work.
• 38% want to improve their debt management to avoid over-indebtedness.

Financial education is thus positioned as a pending subject in Spain, with a direct impact on young people's ability to manage their money efficiently.

Source: La Razón, El Confidencial