FOMO is real, and it's costing millennials more than they can afford.
Much has been said and written about millennials and their struggles with personal finance, but what exactly are these millennial debt statistics?
Scroll down your social media feeds and you'd be bombarded with images of your friends having the time of their lives in fancy restaurants and exotic vacations, wearing the latest fashions to boot. But how do they manage to afford it?
There are a few possible scenarios:
According to a recent Credit Karma survey, plenty of millennials overspend just because they want to keep up with their friends.
These millennials tend to spend on experiences like travel, parties, music, sporting events, and weddings, as well as food and alcohol. Many millennials also feel pressured to buy clothes, electronics, jewellery, and even cars that they can't afford.
The researchers found that nearly 40% of millennials spend money they don't have just to keep up with their peers.
Plus, they're afraid to admit it. 73% of those who have gone into debt keep it a secret.
Millennials are spending more than they should because of FOMO (for the uninitiated, the fear of missing out). 27% of Credit Karma's survey's respondents said that they don't feel comfortable saying no when one of their friends suggests doing something they can't afford.
Buyer's remorse is a common occurrence — two-thirds of respondents admitted regretting spending more than they had planned to on a social situation. And 36% of respondents don't think they can keep up with their friends for another year without going into debt.
Why are millennials especially susceptible to FOMO spending? According to the researchers, it all boils down to social anxiety.
36% of millennials spend more money than they can afford because they're afraid that they won't be included in a future activity if they don't. 27% are afraid of feeling like an outsider. 26% are afraid of losing friends, and 23% are afraid of being judged.
But millennials can take steps to avoid spending more than they can afford and maintain their friendships at the same time. Here's what Credit Karma suggested:
For example, just being honest with your friends can make a world of a difference. You might think that you're alone in your financial struggles, but opening up to your friends might reveal that they're in the same boat as well.
Living frugally doesn't mean that you can't have fun. For example, instead of going out to bars every Friday, why not hang out at each other's homes and make your own cocktails?
Spending with your credit card is easy. A little too easy.
Don't use your credit card to spend on things you can't afford. If you can't pay your bill in full every month, you could find yourself in debt very quickly.
To avoid overspending, carry cash when you go out so you know your limits.
What do you think of these millennial debt statistics? Let us know in the comments!
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