Your money-making expert. Financial journalist, TV and radio personality.
The Gen-Z Journal: FOMO, Friendships and Finances
Hey, I’m Izzy, MoneyMagpie’s inhouse Gen-Z-er. Welcome to the latest installment of my column, ‘The Gen-Z Journal’, where I chat about life as a Gen-Z gal, navigating her way through financial independence in a cost-of-living crisis. Today, let’s chat about earning less – or more – than your friends, and how to navigate these differences.
Being in your twenties and thirties is great. Everything still has that excitement to it – a kind of shiny newness. The world is yours to discover, the path ahead of you is ready to be built. But a real hinderance to the fun of being young and free is money.
It impacts us all in different ways. Some people have a lot of it, some not so much. For many, it’s something they may have never had to worry about. For others, it has been something that has always come with a sense of hesitation, a slight concern – it’s always been within at the forefront of every transaction.
But something I have noticed is how different incomes can impact people in different ways, particularly when it comes to spending time with friends. Booking holidays, days out, having dinners and coffees is great – but what happens if you earn less than your friends? How can you navigate a range of incomes in a friendship group? And how has it impacted people in real life?
Money doesn’t equal happiness, but it’s a huge driving force for many. In fact, Gen-Z is highly pay-motivated when it comes to work, and the cost-of-living crisis has only made people even more wage conscious. This is not a new trend, however. A study from 2016 by job site Monster showed 70% of Gen-Z named salary as a top motivator when it came to joining the workforce. Salary expectations have only increased because of the last few years of economic turmoil (I see you, Covid).
Is this really any surprise? Money makes the world go round, doesn’t it?
I know for me personally, a driving force in wanting to earn more is to enjoy life and make memories. But there have been times I have had to miss out on plans with my friends due to unaffordability. I don’t always make it clear, though. Sometimes I’ll come up with another excuse, as I don’t want people to know I don’t have the cash.
Even though I am lucky enough to have amazing friends who wouldn’t think twice if I said I couldn’t afford it, I still, for some reason, keep the fact I can’t afford it private. I’m generally open about finances – especially since becoming a journalist at MoneyMagpie. But sometimes that weird feeling of taboo creeps in when talking about money.
There will be times I can afford to join in the fun, and others may not be able to. Everyone has different expenditures and outgoings. We are all early twenties, at the beginning of our careers. We all have different goals – a few of my friends are looking to go back into education to do master’s degrees. Others are doing online courses to boost their skills. One of my friends is paying the bills with a job she enjoys, whilst she’s working hard behind the scenes to follow her true passion of being a musician. Another is out of work due to the current economic climate. One just got a huge promotion. So of course, incomes are going to vary.
Financial goals vary at this age also. Some of my girlfriends are saving for deposits, one is putting away for a rainy day and another wants to go on a solo trip in the sun during the winter months. So, when it comes to spending as a group, we all have different priorities and choices as to whether we can afford it or not.
Sometimes I will dip into my savings for events or spends I deem worth it. But even then, the thought of taking money out of my savings feels shameful. It’s drummed into us that we need to scrimp and save at the moment – so spending can feel weird. What if I need the money in an emergency down the line? What if I regret spending it?
But on the other hand, what if I don’t go on the holiday, or the day out, or to the cinema, and miss out?
FOMO – or the ‘Fear of Missing Out’ – is something we’ve all felt. We can’t particularly afford that gig, but we know if we don’t go, we’ll feel jealous we aren’t there with pals living it up. This is particularly the case with social media – people are posting pictures and videos of themselves having fun, and that’s when the FOMO hits.
With studies showing that some teenagers check their social media accounts as many as 100 times per day, is it really any surprise that Gen-Z, the generation who grew up with Bebo, MySpace and Facebook, have an intense worry of missing out on fun, in case they see it on social media?
But how does FOMO impact our spending? Well, from personal experience, I know I have used some of my savings to keep up with those around me. Emotion can be a huge driving force behind spending money and can lead to poor decisions. There’s a voice in my head yelling ‘don’t miss out!’.
Credit management company Lowell conducted a recent study that found a third (36%) of 18–24-year-olds cite poor money management to be their main cause of debt. On top of this, a quarter (25%) of 25–34-year-olds say credit card debt is their main money problem. Is FOMO part of the reason for this?
Scrolling on social media, you see people on luxury holidays, eating expensive meals and buying themselves the latest outfits. This can cause FOMO for sure, but this could be intensified further if it’s people you know sharing this content.
According to a report by Credit Karma, nearly 40% of young adults said they spend more on experiences than necessities like paying bills, in part because they want to share their enjoyment of that experience on social media. A majority of those surveyed also said sites like Instagram and TikTok have had a negative impact on their financial well-being. However, FOMO was a more powerful force than anything else in making bad financial decisions.
Let’s go back to different incomes within a friendship group. I hope, like me, you have a group of wonderful and supportive people, and there is zero judgement about who earns how much and no friction when it comes to the topic of money.
However, for some, money has been a point of contention – not because of the judgement that they earn differing amounts, but more because higher-earning friends haven’t considered that their mates may earn less when it comes to planning an event.
I spoke to Marie*, aged 27 from Dorset, who told me about a recent experience surrounding her friend’s hen do. Her friend, let’s call her Evie, had always spoken about how she just wanted a small get-together for her hen do – some drinks, maybe a nice dinner and a boogie at the local pub. But when it came time for planning, Marie was shocked to be handed a bill for almost £400 for a weekend in London.
‘Evie works in finance, so makes a really decent income, she works really hard and has worked her way up,’ says Marie. ‘The same can be said for most of the other bridesmaids. She knows most of them through work, so they are all on similar salaries.’
Marie owns a small business selling handmade jewellery, and studies part time. She lives with her partner, who works in construction. Although they are doing well, Marie and her partner don’t have huge amounts of spare cash. ‘Having to go part time with my businesses to study reduced our income, now most of our money goes to our rent and bills. We’re okay and get by, but we need to be careful.’
I asked Marie to expand on the hen-do situation. What happened? ‘Well, I was added to a text conversation organised by Evie and the other bridesmaids to discuss the hen do. All super exciting, until they relayed the plans for the weekend – an expensive Pilates class run by some personal trainer to the stars, so the cost was inflated big time. Then, brunch at a hotel in London, a cocktail-making class at a rooftop bar, followed by a sushi dinner, then a West End show, then a night out at a club, where we’d get a VIP booth, finished with an overnight stay in London.’
I was hesitant to ask, but…how much would it come to? Marie visibly winces and tells me – almost £400 for the weekend. Each! She goes on to tell me about the dilemma she felt she was in – Evie being her long-term best friend, wanting to celebrate her wedding, wanting to be with the other bridesmaids, but knowing the price tag was just not manageable.
‘I was in this kinda weird space, I felt a bit frozen. Everyone else was excitedly chatting about it, with message after message coming through of the rest of the girls agreeing to the plans and confirming they would be there. I was just totally shocked – I love Evie, but £400? That’s almost half my monthly rent!’
She continues: ‘It was weird too because I felt really embarrassed that I couldn’t afford it – they’d clearly all just assumed I was able to afford it, so how on earth did I admit I couldn’t? I also felt a bit annoyed as they hadn’t considered not everyone earns the big bucks in finance, and I was deflated by that.’
Ultimately, Marie spoke privately to Evie and told her she’d only be able to make it to the West End show, then she’d need to get the train back to Dorset that same night. ‘I tried to compromise, I thought maybe I could just come for the second half of the day or something, but even that was a stretch. Being a part time student means I just can’t justify spending so much.’
I asked about FOMO. ‘Yeah, that bit was tough. I knew I’d have to see the cocktail making and the VIP booth on social media,’ she tells me. ‘It was a really horrid feeling, and I ended up asking Evie to keep it private that I couldn’t afford it. I didn’t want to other bridesmaids to know, so just told them I had a lot on so could only join them for one part of the day.’
*Names have been changed for privacy.
I know I’ve had experiences like Marie, and I’m more than likely to have them again. Although mine often aren’t as extreme (£400 for one day?!). But even if it’s £30, it can feel awkward.
So, how can you navigate this? When it comes to spending time with your friends and planning costly pastimes, being open, honest and transparent is super important.
A recent YouGov survey found that 42% of Gen-Z employees say they have spoken openly with colleagues about their wages. This is a trend gaining traction, with young people leading the way when it comes to salary transparency.
This is something I have tried to be open with my friends about, too. We don’t sit for hours chatting about what we earn, who earns most and who earns least – of course not. But should it come into conversation, I try and stay as open as possible about what I earn.
From time to time, I make up an excuse when I can’t afford to join in on some of the fun we have together. But I am working on it. I hope that the more open I am about my finances, the more open my gal pals feel they can be, too. Our friendship is a safe space, after all.
The more open you are, the more you can ask for compromise when it comes to spending money together. If your friend on £50k a year said they can afford to spend £1,000 on a holiday, whilst you’re on a wage that will allow £400 max, chat to them about it. Be transparent, ask if you can focus on a lower budget. Explain your situation, open the conversation and have an honest and frank discussion.
Remember, your friends should always be kind about finances. If they aren’t – get rid. They’re no friends of yours.
I’ll keep this short and sweet. Once you admit to yourself there may be times you’ll have to miss out, you’ll start to come to terms with it. Accepting you won’t be able to attend every single event in life will make missing out easier.
Learn to prioritise and ask yourself ‘Is this worth it?’. Is it the day out, concert or dinner you’re worried about missing, or are you worried you’re going to feel FOMO? If it’s the latter, give it a miss. FOMO is easier to overcome than overspending. If you’re worried that you’ll see your pals having fun together, delete your social media apps, or at least log out for the time being. Out of sight, out of mind, after all.