Earlier this year, a study found that 44% of Gen Z and Millennials avoid social outings or events that are too expensive, and 59% said their financial goals are affected by going out with friends. While some have decided to discontinue social outings or go into debt to keep friendships, others are getting creative in their solutions.
A group of friends in Australia started a shared savings account so they can afford to travel together without worrying about members of the group missing out due to tight budgets. The friends each put in a set amount each week and have been able to go on annual vacations for three years.
Joint savings accounts for big purchases, such as trips abroad or simply regular brunch outings with the girls, could relieve some of the strain people feel on their friendships from repeatedly needing to turn down invitations because inflation and economic turmoil have made the cost of living rise.
Price inflation on food away from home has increased 3.9% since July 2024, and alcohol has increased 3.4%. Friends joining efforts to maintain their standard of living and enjoy a few more vacations may help with the loneliness crisis that arose in 2020.
Friend savings account holders have found this has made saving fun for them, likening the account to a swear jar. A TikTok trend with people posting about their friend savings accounts tells how this method has saved friendships.
While many may benefit from joining finances with friends, there is still risk involved. When opening a savings account where many people have equal access to the funds, all account holders are held liable for overdraft fees. Being associated through a banking relationship in this way may also affect the credit of other account holders.
High levels of trust and loyalty are required for the friends who choose this saving method. Similar to married couples joining finances, there must be a mutual agreement on how the funds are used, what to do if one person is no longer able to contribute, or if the friendship goes sour.
In marriages, there are legal ways to sort out financial assets and protect both parties, should a divorce happen. It may be more complicated in a friendship without legal boundaries in place.
If friends have trust in each other and agree on how to contribute and what to do with the savings, joint savings accounts may allow for more relaxed vacations. It may also provide more financial security as these conversations may lead to deeper conversations on financial goals, wise spending habits, and an openness in times of struggle.
However, there are other ways to save for vacations and outings with friends, with much lower risk should your friendship come to rocky territory. A financial content creator advises using individual sinking funds where each person can set aside an amount regularly, and a group can pay for vacations from these funds.
Individual sinking funds are just one of many financial tools that people can use to save or finance large purchases. Trends that focus on saving in order to afford large purchases benefit those involved while moving away from buy-now-pay-later programs. While by-now-pay-later plans have their place, wise saving will help personal finances and friendships.
Bottom Line
Joint savings accounts may make things easier to travel with friends, but this is just one instance of banking solutions that people can take advantage of to save and invest in their own priorities.