A couple of days after a study revealed that millennials¡¯ lavish lifestyle in the US had landed them in $3.8 trillion of debt, another trend among the youngsters has cropped up.
A recent study found that many youngsters in the US are now?breaking up with friends?who tempt them to overspend.
Over one-third of Gen Z and?millennial?consumers admitted to?having a friend who leads them to spend beyond what they can afford, according to an American multinational personal finance company's study?conducted by US software firm Qualtrics.?The study, which ran last month from June 7 to June 9, asked over 1,000 US adults over 18 about their spending habits.
"If you're starting to lose friends over misaligned spending habits, it's really time to just level up," said Courtney Alev, director of product management and a consumer financial advocate at the company, as per a Business Insider report. "It's important to keep your finances and your friendships in order."
Also Read:?5 Financial Habits?Youngsters?Should Not Inherit From The Older?Generations
The reason youngsters are overspending? Respondents chalked up part of their spending habits to FOMO, or fear of missing out. Over 30% of Gen Z and millennial respondents said the main reason they overspent alongside their wealthier friends was because they didn't want to feel left out.
"A big theme of this is FOMO," said Alev. "There's obviously so many opportunities, especially coming out of Covid and with people starting to travel again."?"For things that are less compelling or not worth the money, be willing to say no, and that will open up a lot of other freedoms for you," Alev said.
Also Read:?How Millennials Have Landed Into?$3.8 Trillion?Debt In The US
But these spending habits are drawing some consumers into debt. 88 percent of millennials and 80 percent of Gen Zers said spending time with these friends resulted in them taking on debt.
In some cases, overspending drove these consumers into over $500 in debt and prompted some to consider calling it quits with their "spendy friends," the study found. Among those who said their friends led them to spend more, 47% of millennials and 36% of Gen Zers said they were considering ending these friendships due to their different spending flexibility.
According to the survey,?dining out?accounts for much of the overspending. 44 percent of millennials said they overspent on dining out, as did 37% of Gen Zers. In addition, 37% of millennials and 32% of Gen Zers report overspending on?drinks?and nights out.
More than one-third of Gen Z consumers, or 36%, also said they overspent on clothing. Studies have found that Gen Zers, people born between 1997 and 2012, are particularly interested in spending chunks of their income on?luxury brands and fast fashion.
Both groups also attributed part of their overspending to expenses for trips and vacations. While 21% of millennials attributed some of their overspending to birthday celebrations, 20% of Gen Zers said they also overspent on self-care expenses, such as massages and manicures.
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