Study Finds Friendships Proving Too Expensive for Millennials, Gen Z

The Rising Financial Cost of Friendships for Millennials and Gen Z

Recent research reveals that an increasing number of millennials and Gen-Z find maintaining friendships financially burdensome. This new study, referred to as “The Friendship Tab” and commissioned by Ally Bank,, found that 44% of these generations have missed significant social events due to cost.

Fear of Missing Out on Friendships Due to Financial Constraints

The survey discovered that nearly a quarter of Gen Z and millennials fear missing out on friendships and community due to financial limitations. Forty-two percent admitted to overspending on activities with friends occasionally, while 18% confessed they regularly exceeded their budget.

Interestingly, approximately a quarter of the participants expressed anxiety over lifestyle and financial differences with friends. Over 20% admitted to feeling anxious about being able to afford social activities with friends. This anxiety, coupled with financial pressure, led nearly one in five respondents to admit instances where they couldn’t be honest with friends about their financial situation.

Social Spending Habits of Millennials and Gen Z

Despite financial pressures, millennials and Generation Z are still keen to connect socially. They frequently spend significant amounts on food and alcohol. Thirty-two percent reported dining at a bar or restaurant with friends at least once a week. Over half stated having one to three friends they regularly socialize with.

Approximately one in five people admitted they sometimes couldn’t be honest with friends about their finances. (iStock / iStock)

Popular Social Activities and Their Impact

The most common social activities reported included dining at a restaurant or bar (72%), spending time outdoors (56%), and attending birthday celebrations (50%). However, these social activities seem to be impacting the ability of millennials and Gen Z to budget effectively.

The study further reveals a need for greater financial education among these demographics. Only 18% of respondents claimed to have a firm budget for social activities, and a staggering 59% said their financial goals were impacted by socializing with friends. This suggests that there is significant work to be done in teaching millennials and Gen Z better budgeting and financial management skills.