Can you afford your friends? That active social life can come at a steep price

Yahoo

2 days ago

Maria Stevens' credit cards are maxed out, in part because she relied on them when she was laid off, but she thinks it's also largely because she struggles to say no to invites from her friends.
After attending 30 social events in four years, she said she 'crashed out' over pressure to spend on social activities in July. In one month, she was invited to several more events, baby showers, weddings, and bachelorette trips, on top of planning her own birthday party.
'I'm like, I'm about to have to hide under a rock because there's no way.... I was very overwhelmed,' Stevens said. 'And I was like maybe I'm going to have to cut ties with some people somehow.'
Stevens, 25, is part of a generation often characterized by loneliness, and the financial strain of friendship might be one reason why. Socializing is still important to Generation Z and millennials – 69% of whom prioritize in-person connection with friends at least weekly. But three in five say spending on social activities impacts their financial goals, according to a new Ally Bank survey.
It found that overspending is widespread, not an exception, and most young adults are aware they are not budgeting effectively for their social lives.
More: Gen Z is getting serious about their finances. What's in the way?
How much money do young people spend socializing?
When Stevens got engaged in 2023, she and her now-husband decided they would stop going to bars altogether because they were easily spending $200 in one night — up to $400 if they also went to dinner beforehand.
That's close to what the average young person spends socializing per month. Gen Z and millennials spend on average about $250 each month on activities with friends, according to the survey.
Among respondents, 72% said going to a restaurant or bar is how they spend time with friends and 32% said they go weekly or more often.
Only 18% said they have a strict budget for activities with friends. And 42% reported overspending on their social budgets several months out of the year, while one in 10 said they overspend every month.
Alexia Heath, 24, said she estimates she spends about $150 to $200 on social activities each month, but she isn't sure of the exact figure because she doesn't track her spending closely.
'I neglect it because I just don't want to know and I know that's irresponsible. I'm still making more money than I spend, so in my mind it isn't a priority to see where every penny goes,' Heath said. 'There are times where I sit back and I'm like wait a second, I should have like $10,000. Where is that? Then I think back over the months of randomness.'
After swearing off expensive nights out, Stevens now hosts instead. Still, she said she's spending about $100 each time she has people over for drinks and dinner, even after trimming the guest list.
'I can't really host a lot of people and that can come off as I'm being selective in what friends I have over,' Stevens said. 'For my birthday I was only able to host a third of my friends because I have a small apartment. That was really sad for me.'
Friendship fallouts
But not every friend understands your choosing saving over socializing. When Stevens began focusing more on her financial well-being, she declined an invite to a bachelorette party she couldn't afford. Then she was uninvited to the wedding.
The bachelorette party was going to take place on a cruise, and the bride needed Stevens to pay her share immediately after inviting her. Stevens had just returned from her honeymoon and hadn't been paid in three weeks, which she explained to her friend.
'She was understanding,' Stevens said. 'But then she was sending out invitations for her wedding and posted it on social media and I'm like, 'Oh, are you sending another round?' And she's like, 'Oh, actually we had to cut down the number of people.''
Stevens said they're no longer friends.
'If you tell them, 'Financially, I cannot do this thing for you,' and then they cut you off, that's more about them than you,' Stevens said. 'It makes friendships more clear.'
Such breaks are not uncommon. One in five Gen Zers and millennials surveyed said financial or lifestyle differences contributed to their falling out with a friend.
One post on TikTok discussing being tax-bracketed out of friendships garnered over 50,000 views.
'It's just crazy to think that we live in a world where everyone is looking for that meaningful friendship and yet everyone feels so lonely at the same time,' the poster named Fiona Leona said in the video.
Finances and FOMO
Of those surveyed, 44% have skipped a major event because of the cost, but the decision often comes with a fear of missing out.
Nearly a quarter of Gen Z and millennials said they'd feel left out if they needed to decline an invite for financial reasons.
About one in five respondents said there have been times when they felt they couldn't be honest with friends about money. Stevens said it is 'definitely uncomfortable' to talk about finances, especially because much of her life is on social media.
'(My posts) can easily be perceived as 'Oh she makes all this money because she posts videos.' Mind you, some of these videos could be from years ago, or someone else is paying for it because it's sponsored,' she said.
Lindsay Sacknoff, head of consumer banking at Ally Bank, said while people have long had to balance socializing and saving, social media adds to younger generations' FOMO.
'I can get a feel of what others are doing and am I missing out on something, which creates a bit more stress than just the cost of creating that memory,' Sacknoff said.
Men spend more but stress less
Although men spend more money socializing, women view friendships as more financially straining.
Over the span of six months, the survey found men had spent $1,775 with friends on average, compared to $1,250 for women.
Yet, nearly a third of women surveyed said social spending hampered their savings, compared to 22% of men. A quarter of women said money spent socializing makes paying off their credit card bill more difficult, compared to 16% of men.
At 16%, twice as many women than men reported feeling 'overwhelmed' by their spending habits compared to their friends'.
And while more than a third of men surveyed said they find financial differences between them and their friends motivating, nearly one in three women reported feeling anxious about them.
Sacknoff said one reason that may be is because women often take the lead on planning social activities for their entire family, which may add stress. Heath said the greater anxiety among women may also have something to do with gender roles.
'Our society gives men the space to be confident, and with that comes bolder spending because they're confident they're going to get a raise,' Heath said. 'As girls, we might be making great money, but we're still just inherently worried.'
How to socialize and save
About one in four of those surveyed say tariffs and inflation has made social spending more difficult and they intend to cut back, suggesting lower-cost activities to friends.
For Heath, that means taking advantage of free mixers, run clubs, book clubs, libraries, museums, and other events in her area.
For Stevens, it's taking walks with her friends around their neighborhoods or playing a sport at a free recreation center, but she said free activities are limited where she lives in North Carolina and access to them often depends on the weather.
Still, some people think activities that cost money are just more fun. Another TikTok user posted a video saying she almost wished she had fewer friends so she could still go out but save more money. It also garnered nearly 50,000 views.
'I get we could just sit in bed and go on our phones, but I don't like to do that,' the user said. 'I want to go thrifting. I want to get food. I want to go to the movies. I have to pay for parking at the beach. It's rough out here. Don't get friends guys.'
Sacknoff emphasized that socializing doesn't need to be costly every time. She recommends having more transparent conversations with your close circle about your financial goals and keeping a list of low-cost options in your area.
'In no way are we saying these relationships are not important,'' Sacknoff said. "That is super clear. But we can take out the stress of putting that budget at risk if we do a little planning ahead. You still could take that great picture, have that moment, and have those laughs with your friends.'
Reach Rachel Barber at [e-mail] and follow her on X @rachelbarber_
This article originally appeared on USA TODAY: Can you afford your friends? An active social life can come at a price
Solve the daily Crossword