$6,552 a year: The cost of having friends

Australians are spending a lot on our mates, with many people even prepared to slide into debt to keep up with their family and friends. (Source: Getty)

We Aussies are spending the big bucks to keep our friends happy, with the cost of hanging out with our besties amounting to $6,552 a year.

According to the data from comparison website Finder, many Australians even feel pressured to cough up more than they can afford on their social circle.

As many as 47 per cent of the participants surveyed felt pressured to overspend on things like splitting restaurant bills, expensive holidays and bucks and hens parties.

“That’s almost half the nation spending more money than they are comfortable with,” said Kate Browne, personal finance expert at Finder.

Splitting bills is one of the most contentious issues, with 28 per cent of people feeling pressured to split a bill evenly at a restaurant even when they ordered less.

Another 14 per cent admitted to feeling pressured into an expensive holiday, and 10 per cent into buying tickets to a sporting event or concert.

Another 9 per cent feel pressured to pay for someone’s hens or bucks party.

Keeping up with the Joneses

As well as direct spending on friends and family, people also feel pressured to keep up with their friends by buying nicer cars, houses and clothes.

Browne said as many as one in five Australians had even gone into debt due to financial pressure from friends and family.

Millennials are the most likely to overspend the most on friends and family and admitted spending $1,298 more than they could afford in the past six months.

By contrast, Gen Z overspent $1,039 and Gen X $1,258. Boomers only reported spending $340 more than they could afford.

Men also tend to overspend more on their friends. They overspent $1,560 compared to women, who overspent $912.

Why we splash cash on our loved ones

Browne said these stats may even be higher since not everyone was prepared to admit they spent more to keep up with their social cohort.

She said the need to belong was what tended to drive people to cave to financial pressure, as well as the fear of being called a “party pooper”.

She said “cost creep” played a role, with many people slowly adjusting to higher spending patterns.

“You might have thought spending $5 on a coffee was a lot a few years ago, and then it becomes normal.”

Sticking to a budget and being honest about your finances were good ways to combat overspending, she said.

It also pays to be honest with friends and family.

“Money is a taboo subject and it shouldn't be, but it is starting to change.”

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