Brunching, clubbing and shopping with friends is more expensive than ever and young adults are making tough social decisions to save money.
A recent study conducted by Qualitrics on behalf of Intuit Credit Karma found that more than one-third of Gen Z and millennials (36%) have a friend who drives them to overspend.
88% of millennial respondents are carrying extra debt as a result of spending time with that friend. About 80% of Gen Z respondents echo the same sentiment, but their slightly older counterparts are in deeper over their heads, with 15% of millennials sharing they’re in at least $500 or more in debt because of their influential friends that encourage them to splurge.
The extra costs usually come from overspending on dining out or drinks trips and vacations, birthday celebrations, clothing, and self-care services.
“Spending money to keep up with friends isn’t anything new, but it could be a problem if people are starting to lose friends over misaligned spending habits,” said Courtney Alev, consumer financial advocate at Credit Karma. “Talking about your finances with your friends could help alleviate some of the stress associated with money, especially if you and your friend have different financial situations. Yet, more than a quarter of millennials (26%) say they keep their income and debt a secret from their friends to avoid judgment. If you’re in a situation where you feel pressured to spend money to keep up with your friend’s lifestyle, start by being honest with them about your financial situation and what your limitations are when it comes to spending on things like dining out or a night out on the town. This will help set expectations and limit your chances of overspending when you’re with this friend.”