Doomspending: Why Young Australians Are Giving Up on Saving

An $8 matcha bought five days a week costs $1,920 a year — and for many young Australians, that math is now an argument for spending, not saving. With the median house price in Australia's capital cities at $1.1 million and the median unit at $738,778, according to Cotality research published this month, a whole cohort has concluded the future isn't worth deferring gratification for.

"We feel like we're doomed anyway so why should we save?" says An Tran, a 21-year-old Sydney law student working toward paying her tuition fees. Tran moved from Vietnam two years ago and says she appreciates what she has in Australia, but understands why her friends spend their spare money on matcha, Labubu toys and trending makeup items.

What is doomspending?

Cambridge Dictionary, which began tracking the word last year, defines doomspending as spending money you cannot afford in order to make yourself feel better — behaviour people engage in when they feel anxious and uncertain about the future. Its milder cousin is "little treat" culture: buying affordable, everyday luxuries like takeaway coffees or lunch.

Brand strategist Eugene Healey says little-treat culture emerged because traditional milestones feel out of reach. The rationale is stark: even if you skipped the matcha and saved $40 a week, a 10% deposit looks unattainable and future job security is uncertain — especially amid AI-driven disruption to white-collar industries. Healey says the old social contract, where working hard and saving ensured you'd get ahead, 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.

Healey frames doomspending as a more advanced symptom of the same feeling: "It's a quite significant paradigm shift [to]: 'I don't believe in what the future is going to look like any more … It's much more rational for me to spend that money in the present and to enjoy what I have in front of me.'"

How bad is housing affordability?

The numbers behind the shift are record-breaking. The Housing Industry Association says housing affordability has hit its worst level on record, as rising borrowing costs eclipsed the recent retreat in prices. The average homebuyer nationally needs more than eight years to save a deposit — and more than nine years in Sydney.

A recent realestate.com.au report found a typical household earning $125,000 a year could afford only 12% of homes for sale nationally, a historical low; the previous watermark was 14% in 2008. Lower earners are virtually shut out: a household on $76,000 can afford just 2% of homes on the market.

Meanwhile, wages have barely kept pace with inflation since the cost of living exploded in 2022, making saving harder still.

Is it irrational?

Terry Rawnsley, a senior economist at KPMG, says no. He calls spending on things that make you happy now a "perfectly rational decision" when the alternative — buying a home in the future — is unattainable. And it's not just people in their early 20s: Rawnsley says some millennials in their 30s have found "things haven't worked out for them as it has for previous generations, and so they are having a different mix of priorities in their lives."

He adds a buffer: "This is where superannuation has probably given people a financial safety net when they retire, as it was designed to do so."

Kayshini Logeswaran, a 28-year-old business analyst in Sydney, has a "good, stable job" but says saving for big-ticket items like overseas holidays still feels out of reach. Companies shifting roles to AI and cost-of-living pressures make her more fearful of the future. Her coping mechanism is small and daily: "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."

For retailers, that's steady demand for small luxuries. For policymakers, it's a signal: when a generation stops believing in the future, the receipts show up first.