Emotional spending is out of control for more than one-third of Gen Z, study finds  

  • Over half of Gen Z and Millennial respondents consider themselves emotional spenders
  • Two-thirds of Gen Z and millennial respondents have taken on debt as the result of emotional spending
  • More than one-third of Gen Z believe their emotional spending is out of control (38%)

Spending behavior is often driven by emotions, not logic. This was especially true during the pandemic, which surfaced feelings of anxiety, uncertainty and boredom among consumers. Now, with layoffs and concerns of a potential recession, emotions could be running high driving consumers to spend more money to cope with their emotions – and even take on debt to do so.  

According to a study conducted by Qualtrics on behalf of Credit Karma, 39% of Americans identify as emotional spenders. For the purposes of this study, “emotional spender” is defined as someone who spends money to cope with emotional highs and lows. This trend was even more prevalent among younger generations with 58% of Gen Z and 52% of millennials saying they are emotional spenders, compared to just 19% of respondents aged 59 and above (Boomers+). 

What emotions are driving people to spend?    

Happiness is the leading cause of emotional spending among Americans (29%), followed by boredom (28%) and depression (22%). And, Americans say they’re more likely to spend money as a way of treating themselves when they’re having a good day than when they’re having a bad day, 46% compared to 40%.

In both scenarios, Gen Z and millennials were most likely to spend money to treat themselves. On a good day, 58% of Gen Z respondents said they’d spend money as a way to treat themselves, along with 59% who would spend money to treat themselves on a bad day. Other emotions driving Gen Z to spend money include low self esteem (24%) and a fear of missing out (FOMO). 

Americans turn to retail therapy to cope with their emotions. 

According to the study, more than half of respondents would rather spend money on retail therapy than actual therapy to cope with their emotions (54%). However, Gen Z bucks this trend, stating they’re more likely to prioritize therapy (54%) than spending money in a store or online. 

That could be because emotional spending is a mood booster for more than half of consumers who spend money to cope with their emotions (54%). For some, emotional spending feels like a reward (53%), helps them take their mind off of things (49%) and provides a sense of instant gratification (42%). For others, spending money to cope with their emotions helps with stress relief (39%) and provides consumers with a feeling of control over their lives (29%), as well as a confidence boost (24%).  

Emotional spending is leading to debt for many Americans.

Nearly a quarter of Americans say their emotional spending is out of control, leading many to overspend and even go into debt (24%). Similarly, Gen Z and millennials were more likely to admit their emotional spending was out of control, 38% and 37%, respectively. 

In the last six months, more than half of Americans have taken on some amount of debt as a result of emotional spending (53%). This number jumps to 67% for Gen Z and 66% for millennials. Based on the study, a quarter of Americans have accumulated up to $200 in debt in the last six months as the result of their emotional spending. Another 18% say they’ve taken on between $201 and $500 in debt and 10% admit to amassing more than $500 in debt over the last six months from spending while in their feelings.

When are Americans doing the bulk of their emotional spending?

Many emotional spenders find themselves spending when they’re alone (27%) and as a way to treat themselves (27%). Likewise, scrolling online before bed can lead to emotional spending with nearly a quarter of Gen Z (24%) and millennials (21%) reporting they do the majority of their emotional spending while laying in bed and another 18% of Gen Z and 13% of millennials doing so while scrolling through social media. 

Emotional spending results in feelings of regret.

The instant gratification consumers feel right after making a purchase can later turn into feelings of regret if the habit persists. According to the survey, 45% of respondents feel a sense of buyer’s remorse (feeling guilty about spending/splurging) from emotional spending and 59% say they now want to cut back on their spending. Unsurprisingly, those doing the bulk of the emotional spending are the ones feeling the most buyer’s remorse, with 56% of Gen Z say they feel a sense of buyer’s remorse from emotional spending, along with 52% of millennials. 

“While treating yourself is a form of self-care, emotional spending can have an adverse effect on your finances,” said Courtney Alev, consumer financial advocate at Credit Karma. “If you’re an emotional spender, try pausing before making a purchase and consider how you’re feeling at the moment. Are you buying the item because it’s something you really want or need, or are you buying the item to offset how you’re feeling? If you’re unsure, try imposing a 24-hour rule on all discretionary purchases. If you’re still thinking about making the purchase the next day, consult your budget and make sure the purchase fits into the dollar amount you have allocated for your ‘wants’ that month. As a general rule, you should allocate 30% of your take home pay towards ‘wants’, 50% towards ‘needs’ and 20% towards financial goals, such as building savings and/or paying off debt. If you’re unable to make the purchase and still seeking a dopamine hit, consider other ways to improve your mood like exercising, watching an episode of your favorite show or learning a new skill. This can give you the mood boost you’re after without taking a hit to your finances. And if you find yourself not being able to stop thinking about that item, consider saving a small amount each week or month to save up for it.”


This survey was conducted online within the United States by Qualtrics on behalf of Credit Karma between February 22, 2023 and February 27, 2023 among 1,008 adults ages 18 and older.