It’s a bad money habit that many of us are guilty of. Whether it’s buying new clothes to avoid ‘outfit repeating’, or splurging on an Insta-worthy holiday, it can be all too easy to overspend in a bid to impress others.
New research by Finder found one in six Aussies – or 3.2 million people – had gone into debt or spent more than they could afford to keep up with their friends and family.
Aussies overspent by a whopping $1,246 in the past six months to ‘keep up with the Joneses’, the nationally representative survey of 1,057 people revealed.
Overspending was especially common among young people, with 30 per cent of Gen Zs admitting to the bad habit, along with 21 per cent of Millennials.
Sarah Megginson, senior money editor at Finder, said FOMO was a common reason behind the overspending.
“People get caught up in social comparison as a need to impress friends, relatives and colleagues,” Megginson said.
“Social media is a big contributor, with people’s ‘highlight reel’ constantly on display.
“But the satisfaction of buying things to project a certain lifestyle is short-lived and those feelings usually fade pretty quickly. Then, all you’re left with is mounting debt to manage.”
Aussies overspending on holidays and designer goods
Aussies admitted to overspending on expensive holidays (14 per cent) and designer items (6 per cent) to keep up with others, the survey found.
People also overspent to avoid awkward money chats. One in five people (27 per cent) said they felt pressured to split the bill evenly when going out, despite ordering less than others.
There shouldn’t be any shame in telling your friends you are on a budget, Megginson said. But that can often be easier said than done.
Megginson recommended bringing cash to help you stick to a budget and having a conversation about it beforehand.
“It’s much better to have one slightly awkward conversation first, rather than feeling stressed and resentful afterwards because you subsidised someone else’s cocktails.”
The survey comes amid rising cost-of-living worries.
A recent Beyond Blue survey found that cost-of-living pressures were the main cause of stress for Aussies right now.
Inflation surged to 7 per cent in the year to June, before easing slightly to 6.8 per cent in the year to August.