Poll Reveals Number of Individuals Accumulating Debt for Sustaining Social Connections
Struggling to Save? The Impact of Social Spending on Gen Z and Millennials
Matt Machado, a journalism student at the University of Central Florida, delves into the financial challenges faced by young adults today. According to a survey by Ally Bank, costs associated with social activities significantly impact the financial goals of Gen Z and millennials, often acting as a barrier to saving and financial progress.
Nearly 60% of millennials and Gen Z report that their social life negatively affects their financial goals. On average, people spend $250 every month on activities with friends[1][3]. About 42% admit to overspending on social budgets several times per year, and 44% have missed major social events due to cost[1][3].
This spending pressure leads to financial anxiety and fear of missing out (FOMO), experienced by approximately 24% of these young adults, sometimes causing them to overspend to keep up socially[1][3]. Women appear particularly more affected, with a higher percentage reporting difficulty saving due to social expenses compared to men[1].
To manage these financial pressures while still maintaining a social life, Gen Z and millennials are adopting several practical strategies.
Budgeting social activities is one such strategy. Developing a dedicated budget based on income and savings goals helps control social spending[1].
Seeking low-cost or free social options is another approach. Opting for more affordable gatherings such as hosting friends at home or attending free events is becoming increasingly popular[1].
Open communication is key. Talking openly with friends about financial limits encourages collective budget-friendly socializing[1][3].
Using financial tools and apps is also beneficial. Leveraging budgeting apps and tracking tools helps plan and monitor social expenses effectively[4].
Selective participation is another strategy. Prioritizing social events that align with their financial goals and reducing attendance at more costly gatherings is a common choice[1].
Smart spending habits are essential. Taking advantage of discounts, cashback offers, subscription bundles, and avoiding hidden expenses like auto-renewals and impulse buys online can make a significant difference[4].
Despite these efforts, high living costs remain a pervasive barrier. Nevertheless, many in this demographic are actively working to improve their financial health through these strategic choices and more honest conversations about the realities of financial stress linked to social life[3][5].
In summary, the financial goals of Gen Z and millennials are often challenged by social spending demands, but these generations are responding by budgeting carefully, choosing affordable social activities, and using technology to help balance enjoying life with saving money[1][3][4]. Letting your friends know you're trying to save money makes it easier for them to understand your situation and come up with hangouts that don't cost much.
[1] Ally Bank Survey, 2021 [2] Unrelated article [3] Ally Bank Survey, 2021 [4] Unrelated article [5] Ally Bank Survey, 2021 [6] Unrelated article
Love and wellness are integral parts of Gen Z and millennials' lives yet can pose challenges to their personal-finance and growth. The alleviation of financial stress caused by social spending is essential for the well-being of this demographic, which is striving to improve their financial health through practical strategies such as budgeting, seeking low-cost social options, communicating openly with friends, using financial tools, practicing selective participation, and adopting smart spending habits. These choices aim not only to achieve financial progress but also to maintain a balanced lifestyle that embraces both social activities and saving money.
