Survey Shows How Many People Are Going Into Debt Just To Maintain Friendships
Coffee with friends isn't an inexpensive outing anymore.
Drazen Zigic | Shutterstock The cost of living is making going out and having fun a lot more difficult. Simply enjoying a night out with friends could mean credit card debt for a lot of Americans. Forget the dinner and drinks, even a trip to the movies means dipping into savings.
These days, almost any activity with friends comes with a hefty price tag. As a result, many people are going into debt just to keep up with their social lives. A recent survey by Ally Bank found that more than half of young people are willing to put money on the line to indulge in some fun with friends.
A survey found that 59% of Gen Z and millennials have failed to meet their financial goals due to the costs associated with fun and friends.
To start off, Ally Bank explained that three out of five young adults admit that social spending impacts their financial goals. Still, 69% prioritize seeing friends in person at least once a week. So, while people know going out is expensive, they still want to do it. And honestly, why shouldn't they? We all work so hard, the little time we have for friends and fun is shrinking by the minute, and with the state of the economy, it's making matters even worse.
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Not only do people want to spend time with friends, but they’re also afraid of missing out on experiences. This feeling, known as FOMO (fear of missing out), drives many to do whatever it takes to partake in social plans.
The research found that nearly a quarter of those surveyed fear missing out on social connections because of financial constraints. The result? About 42% admitted to overspending on activities with friends during a few months of the year, while 18% said they overspend nearly every other month. Meanwhile, 59% of Gen Z and millennials admitted that their financial goals were impacted by social spending. Going even further, 42% said they overspend on their social budgets several months out of the year.
Many young people neglect to budget for their social spending.
Still, there are times when people simply can’t afford to go out and have to miss out. Ally Bank found that 44% of Gen Z and millennials have skipped major events due to the cost. One in four said their social spending makes it difficult to build savings. That becomes even clearer when you consider that, on average, people spend $250 every month on activities with friends.
One of the main issues with this reality is that young adults are the most affected, especially since many don’t budget for their social lives. The survey revealed that only 18% of respondents have a strict budget for spending time with friends.
Jack Howard, head of money wellness at Ally, told CNBC, “You gotta just put it in your budget,” Howard said. “I think a lot of people just don’t realize that cocktails with my girlfriends this day and brunch this day, and then I DoorDash with my partner another day, all of those expenses add up.”
That's what makes the whole budgeting thing seem so unfair. These activities aren't what anyone would consider lavish. Most people don't want to save money for coffee with friends in the same way they budget for basic living expenses. Unfortunately, with stagnant wages that don't reflect the current cost of living and an unstable economy, that's the reality nowadays.
And it seems young people are starting to find a solution: “no-spend hangs.” The research explained that 43% of Gen Z and millennials are finding ways to spend time together without spending money, allowing them to save up while still having fun.
Cheap hangouts are now trending.
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The data from Ally Bank provided insight into how people are dealing with the rising costs of going out, but it’s also essential to look at personal experiences. One Reddit thread explored the topic when a user asked the question: “How do you stay frugal while hanging out with friends?"
Most answers revolved around hosting hangouts at home. One user suggested rotating movie, wine, coffee, or dessert nights at each other’s houses. “Everyone brings a random DVD,” they wrote, “or you pick a random movie that’s free on Amazon Prime or Netflix. The worse the movie, the better.”
But can you still go out and save money? Absolutely. Another user mentioned free concerts, hikes, walks, donation-based yoga, dispersed free camping, hot springs, bike rides, free meetup events, and museums with free or discounted days. If you look closely, you’ll find several opportunities for affordable fun.
Another key point in the thread was the importance of letting your friends know you’re trying to save money. Being honest makes it easier for them to understand where you’re coming from. For instance, if you keep turning down invitations to eat out, they might assume you’re not interested in hanging out, when really, you’re just trying to save up. But if you're honest about your situation, they can help come up with hangouts that don’t cost much.
The picture Ally Bank painted was clear: yes, people are struggling to afford hanging out. But that’s not the end of the story. The survey itself introduced the idea of “no-spend hangs,” and Reddit users created lists of free or low-cost activities. Having fun doesn't need to be expensive, and you should try it out.
Matt Machado is a writer studying journalism at the University of Central Florida. He covers relationships, psychology, celebrities, pop culture, and human interest topics.
