How ‘Election Fatigue’ Can Lead Us to Overspend
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Here's your Money Briefing for Monday, September 23rd. I'm J.R. Whelan for The Wall Street Journal. There are lots of reasons why people overspend. Impulse of shopping, the feeling of, but it was on sale, or I just had to have it. But as we get closer to November, something else has crept onto the list. Election fatigue.
It is affecting people who are struggling to see the smaller picture within themselves. the bigger picture. A lot of people have unfavorable views of both political parties. And there's this feeling that there's no point in saving, no point investing, no point in developing these healthy financial habits because you have this pessimistic view.
We'll talk to Wall Street Journal contributor Julia Carpenter after the break.
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The daily drumbeat of election news and high-volume political ads has caused some people to find comfort in overspending. Wall Street Journal contributor Julia Carpenter joins me.
How does election fatigue show up in everyday spending habits?
Juliette, how long has this relationship between election fatigue and overspending been going on?
It's something economists have long debated. Every election cycle, people get very worried that consumer spending will be decreasing, and then other people are worried it will be increasing. And so every year we're sort of reassessing whether or not this is true and what it means for what's happening in the economy right now. But I informally polled my friends, other young people, peers, and And it seems that when everyone is fatigued by the headlines, the nonstop news, they just decide to bury their heads in the sand and seek comfort in purchases.
So what's the connection? Why does politics influence people's spending habits?
So we know that there is this effect called the what the hell effect. It's when you feel very overwhelmed by things. You throw your budget out the window, literally throw your hands up in the air and say, what the hell? We see it when people feel overwhelmed by life or work or anything else besieging them. And that's where we see this temptation of treating yourself creeping in.
So who is this affecting the most?
When I was speaking with advisors, they said that it is affecting people who are struggling to see the smaller picture within the bigger picture. We already know that young Americans take this particularly grim view of US politics. A lot of data from Pew Research Center shows that a lot of people have unfavorable views of both political parties. and that they're feeling pessimistic about the direction of the country. And there's this phenomenon that researchers have called financial nihilism. That's that feeling that there's no point in saving, no point in investing, no point in developing these healthy financial habits because you have this pessimistic view.
But is it fair to blame overspending entirely on politics? Are there other forces at work?
Totally not fair to blame entirely on politics. I wrote in the piece about how a friend and I recently got together and what was supposed to be kind of a low-key getaway became bougier and bougier and bougier. I cannot blame that on politics. I can blame it on a couple other things. But I think it is this feeling of overwhelm that an election cycle contributes to.
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