How often do you feel pressured into spending money to keep up with your friends, co-workers, or others in your social circle? For younger Americans, the answer may be “too often.” Fortunately, this tendency tends to taper off as we get older, although it doesn’t vanish entirely. In a recent survey by TopCashBack, 74% of 18- to 25-year-olds said they spent more money than they were comfortable with to fit in socially. Forty percent of respondents in the same age group said they compare their lifestyle to others on social media “often” or “very often.”
Older Gen Z and younger millennials, ranging in age from 25 to 35, were the most inclined to overspend socially, at 76%.
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Baby boomers aren’t immune to social spending, though. Two-thirds (66%) of those ages 66+ said they spent more than they were comfortable with to fit in socially. However, social media posts had barely any influence on the older crowd; only 3% of respondents ages 66 and up said they compared their lifestyle to those on social media.
Where People Feel Pressured to Overspend
Not every social situation creates the same pressure to overspend. Dining out tops the charts for those ages 18 to 25 (79%), 26 to 35 (77%), and 36 to 45 (72%). Those who are 46+ felt more pressure to spend for birthdays or celebrations. Other situations that lead to overspending include nights out, where 62% of those ages 26 to 35 and 66% of those ages 18 to 25 feel pressure, and group trips, where more than 50% of those under age 45 feel pressure to overspend.
Surprisingly, as the price of event tickets rises, only one-third of those ages 18 to 25 feel pressured to spend too much money on concerts or performances. That percentage drops with age; only 14% of those ages 66+ feel pressured to spend more on concert or performance tickets.
Motivations to Overspend
The motivations for overspending also change as we get older. More than half of respondents ages 45 and under said they overspend “to feel included.” The percentage is highest for 18- to 25-year-olds, with 64% saying they overspend to feel included. Meanwhile, 61% of 26- to 35-year-olds said the same, followed by 54% of 36- to 45-year-olds.
The majority of 66+ respondents (69%) said they overspend because they “genuinely want to,” while only 32% overspent “to feel included.” Genuine desire is a key motivator for younger people, too. More than 61% of those ages 18 to 35 said they overspent because they wanted to.
Where Peer Pressure Comes From
Most spending pressure, across demographics, comes from people we know personally in real life. For more than 79% of people ages 18 to 25, the pressure comes from people they know in real life, while just around one-third comes from people they know on social media or from influencers, celebrities and public figures on social media.
While 30% of people over 66 say they don’t feel any social spending pressure, just under 10% of adults aged 18 to 25 can say the same. When it comes to pressure from real people, 78% of adults ages 18 to 25 said that close friends “make them spend the most.” In the 66+ demographic, only 34% cited close friends as a key motivator. The majority (59%) said pressure from family makes them spend more.
As people get older, pressure from family plays a larger role in overspending, while pressure from close friends has less of an impact, in general.
Older generations are also less inclined to pressure others to spend. Slightly less than 13% of people 66 and older said they’ve encouraged someone to spend money on something after that person expressed concern over the cost. On the other hand, more than 35% of people ages 18 to 25 have encouraged overspending.
The percentage of people pressuring their peers tapers off with age, too. Roughly one-third (31.82%) of people ages 26 to 35 have encouraged others, one-quarter of people ages 36 to 45, and only 22% of people ages 46 to 55. Just under 15% of older Gen X and younger Boomers (ages 56 to 65) have encouraged others to spend money.
The Consequences of Social Overspending
Overspending in social situations can wreak havoc on your financial goals – and that habit doesn’t get any better as people get older, according to the survey. More than 36% of Boomers ages 66 and up have put a social expense on a credit card even though they couldn’t pay it off in full when the bill came due. However, Boomers were the least likely (33%) of any demographic to say yes to plans they couldn’t afford.
Communication: The Key to Balancing Your Social Life and Finances
Social pressures may ease up for older adults, but the temptation to overspend still exists. There are options to reduce spending and still see friends and family. It starts with communication.
If you go out to dinner, it’s okay to request separate checks and order something less expensive. If you’re invited to a wedding or birthday, don’t go overboard on the gift; only spend what you can afford. Recognize that it’s okay to suggest a lower cost alternative to a pricey restaurant. If your friends are going to a concert that would stretch your budget, offer to meet up with them another night to see a local band.
Being mindful of social spending and being honest with your social circle can help keep your bank account and your calendar full at every stage of life.
