Generation Z and millennials are caught in a financial tug-of-war, battling budget anxiety and the fear of missing out. With rising inflation affecting restaurants, bars, and event tickets, how are rising generations supposed to keep up with each other and reach their financial goals? While other generations have had to strike a balance between eating out with rising inflation or saving in order to reach their financial goals, many young people are now encountering this problem in an era where social media highlights what they might be missing out on. 

The common answer to finding a balance is to avoid outings or events that are too expensive. Forty-four percent of Gen Z and millennials have chosen to do so due to cost, according to an Ally Bank study. Even with people skipping major social events, 32% still go to a restaurant or bar with friends weekly or more often and spend an average of $250 every month on social activities. 

The cost of social outings has been growing: Food away from home has increased 3.9% since July 2024, alcohol away from home has increased 3.4%, and admission tickets have increased 3.8%. However, this is not a new issue. Costs have been rising steadily for decades, and previous generations had to navigate economic difficulties too.

The study also found that 22% of these generations feel anxiety when they are uncertain about being able to afford activities with friends, and 25% feel anxious about financial and lifestyle differences with friends. 

These anxieties lead to young people agreeing to activities despite the cost being out of their budget or affecting their financial goals. Eighteen percent of millennial and Gen Z respondents have a firm budget, but 59% say their financial goals are affected by going out with friends. While a budget helps maintain financial goals, it is only effective if you stick to it. 

Although some personal responsibility must be taken in the field of overspending, there is no doubt that inflation and rising costs affect how young people form relationships today. 

Despite anxiety, young generations will need to learn to delay gratification and refuse outings they cannot afford eventually. The average credit card debt among Gen Z is $3,744, and $7,558 among millennials. With average credit card interest rates hitting 24.35%, it’s difficult for these generations to even afford their debt, let alone the friendships that insist on eating out often.

If younger generations are over-influenced by social media and continue attending social events they cannot afford, they will learn a hard lesson later in life. Knowing a cut in Social Security benefits may affect their future, saving while they are young should take priority over weekly outings with friends. 

The weight of affording their future also affects women differently. Only 57% of all women are confident they will meet their financial goals compared to 75% of men. However, anxiety over finances has not necessarily discouraged consumption as 32% of gen Z and millennials visit a restaurant or bar with friends at least once a week.

Bottom Line

Inflation is rising, and so is the cost of maintaining friendships. Not only is eating out 3.9% more expensive than last year, it may cost younger generations more if they take on debt or forego saving in order to afford friendships that stretch their budget.