Debt to impress: 3.2 million Australians are spending money they don’t have
Australians are blowing their budget in an effort to impress others, according to new research by Finder.
A nationally representative survey of 1,057 respondents revealed 16% of Australians – equivalent to 3.2 million people – have spent more than they can afford to keep up with their inner circle.
Finder's research shows this is especially common among younger generations – gen Z (30%) and millennials (21%).
Australians have admitted to spending a whopping $1,246 over their budget in the past 6 months in an attempt to compete with friends and family.
Sarah Megginson, money expert at Finder, said a fear of being left behind is a common reason Aussies spend to impress.
"Money is still a taboo topic for many and can be tricky to navigate when you're comparing yourself to others who have different financial priorities.
"Social media is a significant contributor with people's 'highlight reel' constantly on display.
"However, the satisfaction of splurging to promote a certain lifestyle is often short-lived and all you're left with is mounting debt to manage in the long run."
Going on expensive holidays (14%) and buying designer items (6%) are some of the ways Australians have felt pressured to keep up.
More than 1 in 4 (27%) have felt obliged to split the bill evenly at a restaurant despite ordering less, while 1 in 7 (14%) have gone on an expensive holiday while being unable to afford it.
Megginson said overspending could be doing long-term financial damage in the process.
"Living beyond your means can lead to short-term suffering and ultimately unmanageable debt that could harm your credit score.
"The most genuine way to demonstrate success is to develop great financial management skills.
"Look at how much you earn and what your everyday bills and expenses are so you know how much you can afford to spend on luxuries such as eating out and shopping.
"There's no shame in letting your friends know you're on a budget and won't be splitting the bill evenly," Megginson said.
Women (21%) are almost twice as likely than men (12%) to give in to financial peer pressure.
Despite this, men ($1,855) spent twice as much as women ($926) in order to impress others.
| Have you ever gone into debt or spent more than you can afford to keep up with friends/family? | |
|---|---|
| Yes | 16% |
| No | 84% |
| Source: Finder survey of 1,057 respondents, September 2022 |
| Have you ever felt pressured to do any of the following with friends/family? | |
|---|---|
| Buy a house/apartment | 5% |
| Buy a nice car | 6% |
| Pay for someone's baby shower | 6% |
| Buy designer items | 6% |
| Pay for someone's bucks/hens night | 9% |
| Buy concert/festival/sporting event tickets | 11% |
| Go on an expensive holiday | 14% |
| Split the bill evenly at a restaurant when you ordered less | 27% |
| None of the above | 56% |
| Other | 1% |
| Source: Finder survey of 1,057 respondents, September 2022 |
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