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A new Ally Bank survey reveals that nearly 60% of millennials and Gen Zers say social spending has impacted their financial goals. The findings show that these younger generations are torn between maintaining a social life and saving for long-term goals like homeownership—goals already made difficult by economic headwinds beyond their control.
Because even before the splurges on coffee and avocado toasts, younger Americans are feeling the pinch in many ways. High interest rates, inflation, and the burden of student loan debt have made attaining financial milestones, such as homeownership, unattainable.
But does this really have to be an either-or situation? Is there a way for them to have, dare we say, the best of both worlds?
Homeownership is already a long shot for young buyers—even without brunch
Current housing market conditions continue to be challenging. In fact, the median age of a first-time homebuyer “has reached an all-time high age of 38 years old, three years older than in July 2023,” according to the National Association of Realtors (NAR).
In addition, mortgage rates remain very elevated, with the 30-year average mortgage rate standing at 6.72% for the week ending July 31, according to Freddie Mac.
While many Gen Zers dream of homeownership, they made up a meager 3% of total homebuyers this year, according to NAR. In comparison, boomers accounted for 42% of buyers.
“It’s worth noting the rising cost of living, inflation, high home prices and interest rates make homeownership more challenging for younger generations, regardless of whether they’re spending money on brunch or not,” says Steve Sexton, CEO of Sexton Advisory Group, adding that on top of the current climate, many Gen Z individuals grapple with student loan and credit card debt and lower incomes, making it difficult to save for a down payment.
Beyond the financial difficulties this generation is facing, some financial habits also might come into play, as the Ally survey found. For instance, 42% of Gen Z and millennials say they overspend with friends a few months a year, while 18% overspend every other month.
Sexton argued that a huge culprit is social media, which has shaped spending behaviors and attitudes in the past few years.
“Between social media influencers sharing sparkly content from their travels to your acquaintances posting their fifth ‘euro summer’ in a row, social media has taken the term ‘keeping up with the Joneses’ to the next level,” he says.
“And when homeownership seems so out of reach due to the current climate, it can feel tempting to allocate funds towards experiences as opposed to an unattainable financial goal,” he says.
Social spending isn’t reckless—it’s a reflection of deeper financial stress
While it might be easy to fall back on stereotypes—like the idea that Gen Z and millennials are simply “bad with money” or spend recklessly—experts say it’s not that simple.
In their defense, the Ally survey found that 44% of young Americans have skipped major social events due to cost and that another whopping 24% feel anxious about financial/lifestyle gaps with friends. In addition, 22% say they often feel anxiety before social outings due to cost uncertainty.
“FOMO is real and can lead to overspending that harms our financial well-being,” Jack Howard, head of money wellness at Ally, said in the press release.
While planning for financial milestones such as homeownership is important, maintaining mental health, friendships, and social activities are equally crucial.
Bobbi Rebell, CFP, personal finance expert at CardRates.com, says that it’s encouraging to see growing awareness around social spending, along with more honest conversations about the financial anxiety many young people are experiencing.
“Financial stress and anxiety, along with peer pressure, are not new, but the awareness and conversations about it are becoming more common,” says Rebell. “That’s good news. If groups of friends can now start talking about what’s really going on, real change can happen and more young people can feel empowered to make healthier financial choices and share those choices with their friends.”
Melissa Murphy Pavone, CFP, CDFA, founder of Mindful Financial Partners, says that when it comes to financial FOMO and homeownership, the truth is that this isn’t just about skipping brunch; it’s about alignment.
“Your investments, savings, and spending habits need to reflect your values and long-term goals. That means striking a balance between learning from your past, investing for your future, and still living mindfully in the present,” she says.
Pavone adds that the Ally survey findings resonate because social spending isn’t reckless. It’s often a coping mechanism for the financial stress young adults feel in today’s housing market. And when homeownership already feels like a long shot, it’s tempting to focus on experiences instead of delayed gratification.
“But here’s the reality: Intentional spending, even in small ways, adds up. Creating a plan that allows you to enjoy life now while setting boundaries around overspending is the key. Start small, start now. Your future self will thank you,” she adds.
Who’s buying anyway? Women lead, men lag—and anxiety remains high
Other notable Ally findings included that financial anxiety is gendered. For instance, the survey found that 30% of Gen Z and millennial women say social budgeting makes building up savings difficult, compared to 22% of Gen Z/millennial men. In addition, 27% of women say social spending makes it difficult to save for emergencies, compared to 20% of men.
“From birthday brunches to bachelorette weekends, social spending adds up fast, and for many women, it’s getting in the way of financial peace of mind, unlike men who report more positive feelings about financial differences with friends,” according to Ally.
Yet, this FOMO-related overspending hasn’t kept women back from representing a bigger share of homeowners. A LendingTree analysis found that “single women who live by themselves are more likely than single men who live by themselves to own a home in 47 of 50 states.”
And the numbers speak for themselves: The study shows that “single women own about 2.72 million more homes than single men.”
With that in mind, Pavone offers “critical” advice, for both men and women, hoping to secure the down payment they need for a house: prioritize yourself.
“FOMO can be powerful, but you can rewrite the narrative with a clear strategy and guidance from a CFP professional,” she says. “You don’t have to give up everything, you just need a plan that allows you to say ‘yes’ to what matters today without sacrificing your future.”