Financial Flair: The Boom-Bust Generation

How young people wound up trapped in a volatile cycle of saving, spending, and debt that will haunt them for decades

Michelle Henderson

runo Solari wanted to stay in shape, but there was only one problem: All the gyms were closed.

Back in April 2020, Solari wasn’t the only one with this dilemma — a lot of people had free time on their hands and a sudden desire to shape up. Of course, it was the height of the pandemic, and he couldn’t get swole in an exercise class. And buying exercise equipment from a store? Forget it. When he and a friend went to Dick’s Sporting Goods, the shelves were already empty.

“Dumbbells were basically nonexistent and a commodity — supply-chain issues were hitting before the supply-chain issues were a real thing,” Solari, a 29-year-old vice president for a New York-based PR firm, told me.

After scouring the internet for hours, Solari finally struck gold — an online classified ad offering a pair of Bowflex dumbbells for $300. The purchases did come with a catch: The current owner wanted to meet in a parking lot 45 minutes from Solari’s home in Miami to make the masked and socially distanced exchange. He left the exchange with a lighter wallet but two dumbbells richer. The purchase — alongside a self-proclaimed addiction to using the Nike app during backyard workouts — made Solari feel like he was taking control of at least one thing during a chaotic time.

Solari, who described himself as “notorious for going out a lot” pre-pandemic, was one of the millions of Americans adapting to an abrupt lifestyle change. All of a sudden, he wasn’t buying rounds of shots and sweating it out on the dance floor. Instead, he was saving his money and only occasionally splurging on workout clothes and equipment. Solari’s forced frugality was just the first swing of a pandemic economy that jerked him between periods of abundance and scarcity. As the world reopened, Solari entered a new phase: The post-vaccine excitement ushered in what he called his “feral era.” 

“I don’t even know how we partied like that, but we really made up for lost time. It was absolutely insane,” he said. But after racking up an uncomfortable amount of credit-card debt, Solari took on a third financial identity: sending out a spreadsheet to his friends outlining how much they owed him.

“Now I’m kind of like, all right, I need to brace myself for the future and reach some of my own personal goals financially,” he said. “That’s kind of where my head is at.”

Solari wasn’t the only American to veer wildly between frugality and all-out spending sprees during the pandemic. For millions of Americans, the past few years have redefined their relationship to money and their finances — perhaps permanently. In particular, younger people — Gen Z and millennials — have seen the early parts of their careers and critical years of their financial lives defined by the shifting sands of the pandemic economy. Just as previous generations’ view of the world was defined by cataclysmic events, experts say that the scars of the pandemic-era relationship with money run deep, and as overlapping crises only intensify in the next few decades, those financial behaviors will stick around. Meet Generation Precarious.

Spending for control

Jamie Feldman, a 34-year-old freelance writer, had never really been an online shopper before the pandemic. But when it hit, she began to feel like she could splurge a bit more — amid the uncertainty of empty shelves and an emptier social calendar, it was appealing to have access to something that was a sure bet.

“I was like, I can buy something and it will come,” she said. “I can still have that sense of ‘this still works.'”

A 2020 study supports what Feldman felt, finding that stressful events, like the quick but painful recession that lasted from March to April 2020, can lead to a perceived lack of control. Feeling powerless and adrift in your circumstances weighs on mental health and makes you feel more distressed. To counteract that, many people try to find activities that give them a sense of control back. And Feldman wasn’t the only one turning to shopping. Real personal-consumption expenditures — the best measure of Americans’ aggregate consumer spending — plummeted in April 2020. But as people began to settle into their lockdown reality, the spending spigots reopened. By March 2021, consumer spending exceeded pre-pandemic levels, and it kept climbing to a record high of nearly $14.4 trillion by January.

“People who were sort of just average shoppers before COVID, it seems that some of them just tipped over the edge and became compulsive. When you think about it, that’s not surprising, because COVID was so fearful and uncertain and held us captive,” Carrie Rattle, a financial therapist and coach for professional women and couples, told me. “Shopping was one of the only means to self-soothe, or escape, or take control of our lives, right? When you shop, you get a dopamine hit. So it’s easy to build a new habit almost overnight when it’s pleasurable.”

But all this spending eventually caught up to Feldman. By July last year, she had racked up roughly $20,000 in debt, fueled in part by her pandemic purchases. After she was laid off from an on-staff role in March 2021, Feldman was forced to reckon with the financial mess she had created.

“I’d been living with this debt, and sort of ignoring it and pushing it away thinking like, if I just stopped, if I never acknowledged it, one day, it would maybe magically disappear,” she said. “And I think getting laid off certainly had a lot to do with getting to this breaking point.”

Other young people were also racking up debt. Millennials’ debt shot up by 27% to $3.8 trillion from 2019 to the end of 2022, according to research from the New York Fed. And delinquencies on that debt are growing: Nearly 2% of the debt held by 18- to 29-year-olds is transitioning into serious delinquency — meaning the payment is over 90 days past due — the highest among any age group.

Feldman said she’s taking control of her debt and has publicly documented her journey of paying down the bill — which now sits at $10,000. But the ability to chip away at a big debt load won’t be as easy for some, especially younger people who are likely forking over more for rent, student loans, and basic goods. 

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