Gen Z and millennials have begun to break up with friends who have extravagant spending habits and tend to make others overspend. The trend aims at an effort by the generations to save money and not go into debt, a recent study has found.
More than a third of Gen Z and millennials reported having a friend who leads them to spend beyond what they can afford, as per a survey conducted by Qualtrics and reported by Business Insider. The study asked over 1,000 adults in the US about their spending habits.
"If you're starting to lose friends over misaligned spending habits, it's really time to just level set. It's important to keep your finances and your friendships in order," stated Courtney Alev, director of product management and a consumer financial advocate at Credit Karma.
According to the study, overspending driven by such "spendy friends" drove these Gen Z and millennials into over $500 (about Rs 41,000) in debt, prompting 47 percent of millennials and 36 percent of Gen Zers to consider ending these friendships.
For most of these consumers, dining out accounts for much of the overspending with 43 percent of millennials admitting they overspent on dining out, as did 37 percent of Gen Zers. Moreover, 37 percent of millennials and 32 percent of Gen Zers report overspending on drinks and nights out, Business Insider reported. About 36 percent of Gen Z consumers also said they overspent on shopping for clothes.
These spending habits, however, are drawing consumers into debt with 88 percent of millennials and 80 percent of Gen Zers saying spending time with these friends resulted in them taking on debt.
"When we think about the impact of that on your finances, especially with interest rates really high right now, going into debt to keep up with your friends is just really stressful on multiple levels," Alev said.
Read more: Millennials lie the most on social media, workplace among all generations, finds survey
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