Gen Z and Millennials Struggle with FOMO Spending

It’s hard to stick to a budget with all of the spending temptations out there. Not only are social media users exposed to targeted ads all day long, they also have to overcome FOMO — fear of missing out — when seeing their friends spend big on vacations, meals, and designer clothes.

That may be part of the reason why 40% of Millennials and Gen Z who felt financially squeezed said it was because of “excessive spending on non-essentials,” according to a new Axios Vibes survey conducted by Harris Poll. Meanwhile, only 17% of Boomers and Gen Xers said the same. Overall, 46% of people who said their spending was out of control blamed FOMO.

You Only Live Once

Older consumers were more likely to blame inflation for their financial woes, while a higher number of young people blamed their personal spending decisions.

So what may be behind this trend? The higher use of social media among younger consumer groups, which is a strong source of FOMO, is likely at play. Data from Pew Research Center shows that young Americans are far more likely to use TikTok, Meta’s (META) Instagram, and other social media platforms than Boomers or members of Gen X.

Younger consumers are also more likely to say it’s better to spend now than in the future even if that was more financially prudent. Sure, you only live once, but this spending behavior comes at a price.

Mom and Dad Foot the Bill

More than 60% of Gen Zers said they rely on financial support from their parents, as did one-third of Millennials. People who said they overspent were more likely to say they needed money from mom and dad.

To put this in context, essential expenses, such as housing, food, education, and medical care, have gotten more expensive over the past years. Still, there are things people can do to cut spending on non-essentials.

Building a line-item budget and developing better purchasing habits by embracing things like the 30-day rule, which requires waiting before buying something, or limiting the budget for “fun spending,” can help.

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