FOMO debt on the rise: Nearly 50% of millennials overspend to keep up with friends

Group of female friends enjoying sushi together at a restaurant. One friend is going into debt to be able to go out with her friends. Image:

In a Nutshell

A new Credit Karma survey shows FOMO-fueled debt is gaining momentum, with almost half of millennials overspending to keep up with friends in 2019 — up from nearly 40% last year.

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More millennials are going into debt to keep up with their peers.

A new Credit Karma/Qualtrics study of 1,041 U.S. consumers shows nearly half (48%) of millennials have spent money they didn’t have and gone into debt to keep up with their friends — up from 39% of respondents surveyed in 2018.

Whether it’s on food or drinks, music events or tattoos, we found an increasing number of millennials are overspending because of rising social pressures.

More than 2 in 5 millennials (44%) from our survey said they’re afraid to miss novel or once-in-a-lifetime experiences, while over one-third (36%) are afraid of feeling like an outsider, up from just 27% who felt this way last year. (Learn about our methodology.)

And even though nearly 1 in 2 millennials has experienced FOMO-driven debt, they’re increasingly keeping it under wraps.

Of respondents who have gone into debt to keep up, 80% said they’d kept the debt a secret from their friends this year, up from 73% in 2018. This may be because many respondents said their FOMO-driven debt left them with feelings of guilt (47%) or shame (33%).

But having an active social life or unique experiences don’t have to leave you, or your bank account, feeling low. We’ve got some tips below to help curb the fear of missing out. But first, let’s take a peek at what may be driving the rise in overspending.

Key survey findings

Nearly half (48%) of millennial respondents spent money they didn’t have to keep up with their friends, compared with 39% in 2018.
80% of millennial respondents who went into debt kept their debt a secret from their friends, compared with 73% in 2018.
Millennials who go into FOMO-fueled debt do so for a range of items and experiences, including food (47%) and clothing (41%), but also cars (15%), tattoos (11%) and housing (9%).
In the past year, nearly one-third (32%) of young adults who went into FOMO-related debt racked up more than $500 in debt, while more than two-thirds (71%) went more than $100 into debt.
And just in case you were wondering, we found Scorpio respondents were the most likely to have gone into FOMO debt (57%), while Pisces were the least likely (42%).

What do millennials overspend on because they’re afraid of missing out?

Last year we found millennials were more likely to spend money they didn’t have on special experiences, such as parties, nightlife or vacations with friends. But what are the specific experiences and items causing millennials to rack up FOMO debt?

According to our survey this year, the No. 1 thing driving millennials to overspend is food (47%), followed by clothes (41%). And there are some millennials who have gone into FOMO-fueled debt on much larger, and more permanent things, too — such as cars, tattoos and housing.

Among respondents who have gone into FOMO-fueled debt, here’s what drove them to overspend:

What have you gone into debt for in order to keep up with your friends? (Select all that apply.) % of respondents who have gone into FOMO debt
Food 47%
Clothes 41%
Travel 33%
Electronics 25%
Music event ticket 25%
Alcohol 24%
Novel or once-in-a-lifetime experience 18%
Jewelry 17%
Wedding party duties (bridesmaid dress, bachelorette and bachelor parties, etc.) 16%
Sporting event ticket 15%
Cars 15%
Tattoo 11%
House or condo 9%
Sports or recreational equipment 9%

No matter the item or experience, social media plays a big part in driving the urge to overspend. A full 2 in 5 respondents (40%) said they spend money on something at least once a year just to post about it on social media.

How much are millennials spending?

Although 81% of millennials surveyed this year say they have a weekly or monthly budget that they try to stick to, spending over a typical weekend can add up.

Nearly one-third of respondents (29%) said they spend more than $100 on a typical weekend out with friends.

And even if people are spending $100 one weekend a month, this can add up. Nearly one-third of respondents who have overspent to keep up with friends said they had gone more than $500 into FOMO-related debt.

How much debt have you gone into in the past year? Respondents who have gone into FOMO debt
$1 to $100 29%
$101 to $250 19%
$251 to $500 20%
More than $500 32%

Why do millennials feel pressured to overspend?

Just like last year, this year’s survey found there are a number of reasons why millennials feel pressured to go into debt to keep up with their friends.

However, year-over-year a greater percentage of respondents say they’re worried about social pressures. For example, 36% now worry about being perceived as an outsider, compared with 27% in 2018. And 41% are worried that if they don’t say “yes” to spending, they won’t be invited to hang out in the future, compared with 36% last year.

Top five underlying causes of FOMO for millennials
Reason % of respondents (2019) % of respondents (2018)
Fear of missing out on a novel or once-in-a-lifetime experience 44% 39%
Fear of not being included in future activities 41% 36%
Fear of feeling like an outsider 36% 27%
Fear of being judged 25% 23%
Fear of losing friends 24% 26%

And this makes sense, given that people are going into FOMO debt for things like food, drinks, music events and travel — all purchases you’d likely share, or feel pressured to share, with friends.

Is your debt written in the stars?

Just for kicks, we also looked at which astrological signs were most likely to have gone into debt to keep up with friends. We found that Scorpios were most likely to have gone into FOMO-fueled debt over the past year (57%), while Pisces were least likely (42%).

However, with more than 40% of people in each sign reporting that they’ve gone into debt in the past year to keep up with friends, it’s apparent that FOMO affects water, earth, air and fire signs alike. Here’s the full breakdown, ranked from most FOMO-prone to least:

Rank Star sign % who went into debt in the past year
1 Scorpio 57%
2 Virgo 56.3%
3 Aquarius 52.3%
4 Libra 49.4%
5 Capricorn 49.1%
6 Sagittarius 48.5%
7 Cancer 47.3%
8 Aries 45.9%
9 Gemini 45.1%
10 Taurus 43.8%
11 Leo 43.5%
12 Pisces 42.4%

 

No matter the sign, if a respondent was susceptible to FOMO debt, they were most likely to overspend on food, clothes and travel (with some exceptions), our survey found. But there are many other things in the world that can cause FOMO. And among respondents who went into debt to keep up with their friends, some signs were more likely to go into FOMO debt on certain items and experiences than other signs:

What have you gone into debt for in order to keep up with your friends? (Select all that apply.) The sign most likely to have gone into FOMO debt for this item % of each sign who said they had gone into FOMO debt for this item
Food Capricorn 70%
Clothes Libra 57%
Travel Taurus 43%
Electronics Aries 38%
Music event ticket Gemini 35%
Alcohol Capricorn 33%
Novel or once-in-a-lifetime experience Capricorn 30%
Jewelry Aquarius 24%
Wedding party duties (bridesmaid dress, bachelorette and bachelor parties, etc.) Pisces 21%
Sporting event ticket Cancer 23%
Cars Pisces 28%
Tattoo Pisces 23%
House or condo Libra 16%

Tips to keep friendships strong while staying out of debt

An active social life does not need to equal hyperactive spending. We have some tips below to help you avoid FOMO-related debt but still maintain your tight friendships.

Spend time, not money

Think about how you can spend in ways other than money, like with your time. Spending time with friends and family is an experience that can be valued over something that costs money.

After all, there’s no reason to be ashamed of being unable to afford a night out or a pricey vacation. As we mentioned earlier, 80% millennials who overspend report keeping it a secret from their friends. But by being honest with your friends, you might be surprised to learn they feel the same way as you.

Talk to your friends about your concerns and find free or more affordable ways to spend time together.

Own your money, don’t let it own you

Eighty-one percent of respondents said they have a monthly budget that they try to stick to, which is a great start and up from 78% in 2018. However, even people who have a budget might struggle with keeping their spending in check.

If you’re among the many who struggle with budgeting, it can be helpful to be more mindful when making a purchase by considering something like whether you could afford to buy the item twice — once now, and once again if something were to happen to it.

If you’re among the many who struggle with budgeting, here’s a pro tip: The next time you’re considering whether you should purchase something or splurge to have an experience with friends, pause and think, “Could I afford this twice?” In other words, can you comfortably buy it once now and then once again with the money left over? If not, maybe you should reconsider and save up your funds until you can pay for the item or experience twice.

You could also consider bringing cash instead of a card to the next outing. More than 2 in 5 respondents (44%) said they used a credit card to pay for an activity they couldn’t afford, and it’s likely because having one on hand makes it easy to pull out and spend. Bringing cash instead could give you a firm spending limit.

Ask yourself: Will this thing or experience matter in five years?

Sometimes the answer is yes. If that’s the case, then it helps to have a budget in place. Think of the 50/30/20 rule — spend 50% of your monthly income on bills and needs, 30% on fun and 20% on savings and paying down debt.  

If you’re not sure about the answer, then you could try pausing before you buy the next concert ticket or agree to the next Friday night out. Sometimes, even sleeping on a decision overnight can help you determine whether a purchase or experience will be worth it.


Methodology

On behalf of Credit Karma, Qualtrics conducted a nationally representative online survey in May 2019 of 1,041 Americans aged 18 to 34 to learn about their spending habits related to FOMO, or the fear of missing out. We also compared results from this year’s survey from last year’s survey to draw year-over-year comparisons.