A recent study has found that the majority of Millennials (born between 1990 and 1999) and Generation Z (born between 2000 and 2010) young people believe that friendship has become too expensive, with economic pressures affecting their social activities. 44% of respondents said they have given up large social gatherings due to cost concerns.
On July 30th, Ally Bank released a research report entitled “New Ally Bank Survey Reveals the Hidden Financial Cost of Friendships”. The report indicates that the younger generation is paying a price to stay connected, impacting their overall financial well-being.
The study, called “The Friendship Tab,” found that 44% of Gen Z and Millennials have abandoned large social activities due to financial constraints, with one-fourth of them stating that social expenses make it difficult to save money.
On average, they spend $250 per month on social activities with friends. Over a span of 6 months, men spend an average of $1,775, higher than women who spend $1,250.
Nearly a quarter of Gen Z and Millennials expressed concerns about missing out on friendships and community activities due to financial constraints. 42% admitted to overspending on social activities in certain months, while 18% said they exceed their budget every other month.
Almost a quarter of respondents admitted to feeling anxious about differences in lifestyle or financial status with friends, with 22% feeling anxious when uncertain about affording to participate in friends’ activities.
Almost a fifth of respondents admitted to sometimes feeling unable to honestly discuss their financial situation with friends.
Despite financial pressures, young people still desire to maintain social connections with friends and are willing to spend on dining and alcohol.
32% of Millennials and Gen Z stated they go to restaurants or bars with friends at least once a week, while 52% have one to three friends they regularly meet up with.
The most common social activities among them include going to restaurants or bars (72%), outdoor activities (56%), and attending birthday parties (50%).
The study also revealed that Millennials and Gen Z have room for improvement in financial planning. Only 18% said they have a fixed budget when socializing with friends, and 59% claimed that social activities with friends impact their financial goals.