Debt to impress: 3.2 million Aussies spend money they don’t have

Australians are blowing their budget in a bid to impress others, according to new research from Finder.

A nationally representative survey of 1,057 respondents found that 16% of Australians – the equivalent of 3.2 million people – have spent more than they can afford to keep pace with those around them.

Finder research shows that this is particularly common among younger generations – Gen Z (30%) and Millennials (21%).

Aussies admitted to spending $1,246 over budget in the last 6 months trying to compete with friends and family.

Sarah Megginson, money expert at Finder, said fear of being left behind is a common reason Australians spend to impress.

“Money is still a taboo subject for many and it can be difficult to navigate when you compare yourself to other people who have different financial priorities.

“Social media is a big contributor with people’s ‘highlight box’ constantly on display.

“However, the satisfaction of splurging to promote a certain lifestyle is often short-lived and you are left with only mounting debt to manage in the long run.”

Going on expensive holidays (14%) and shopping for designer items (6%) are some of the ways Australians felt compelled to follow.

More than 1 in 4 (27%) felt pressured to split the bill evenly at a restaurant despite ordering less, while 1 in 7 (14%) went on an expensive vacation without one the means.

Megginson said overspending could cause long-term financial damage in the process.

“Living beyond your means can lead to short-term suffering and ultimately unmanageable debt that could hurt your credit score.

“The most authentic way to demonstrate success is to develop great money management skills.

“Look at how much you earn and what your daily bills and expenses are so you know how much you can afford to spend on luxuries like eating out and shopping.

“There’s no shame in letting your friends know you’re on a budget and won’t split the bill evenly,” Megginson said.

Women (21%) are almost twice as likely as men (12%) to give in to financial peer pressure.

Despite this, men ($1,855) spent twice as much as women ($926) to impress others.

Have you ever gone into debt or spent more than you can afford to keep up with your friends/family?
Yes 16%
Nope 84%
Source: Finder survey of 1,057 respondents, September 2022
Have you ever felt pressured to do any of the following with your friends/family?
Buy a house/apartment 5%
Buy a nice car 6%
pay for someone’s baby shower 6%
Buy designer items 6%
To pay someone’s money/chicken’s night 9%
Buy concert/festival/sporting event tickets 11%
Go on an expensive vacation 14%
Split the bill evenly in a restaurant when you ordered less 27%
none of these answers 56%
Other 1%
Source: Finder survey of 1,057 respondents, September 2022

Here are 4 steps to creating an emergency savings fund and how much money you should strive to keep in it.