Time with friends is priceless, but every now and then, it can come with a price tag. In fact, 3 in 5 Gen Z and millennials say that spending money on social activities impacts their ability to save, invest and plan for the future. If you're feeling the pressure to maintain a booked and busy social calendar, you’re not alone.
Fortunately, there’s a way to find a balance between your spending and social life without sacrificing your friendships or financial future.
Read more: How to use Ally Bank spending and savings buckets for successful money management
Finding balance between friendships and finances
Spending time with friends is a major contributing factor to your overall happiness and wellbeing. But when casual social outings become too frequent or expensive, it can result in consistent overspending. Not only can FOMO (fear of missing out) lead to spending money you didn’t plan to, but the instant gratification of smaller expenses can also derail wealth-building. While a $50 dinner or happy hour might be fun today, over time, that saved money could grow significantly.
3 in 5 Gen Z and millennials say that spending money on social activities impacts their ability to save, invest and plan for the future.
5 ways to stay social without overspending
These steps can help you balance your social life with your budget.
1. Align your social life with your values
Being intentional about your hangouts gives you the opportunity to participate in activities that align your values with your budget. By identifying what’s most important to you, your social life can better reflect your priorities. For example, if you enjoy giving back, volunteering is a free and fun way to spend time with your friends.
If you’re not sure where to start, our free Money + Values virtual workshop can help you identify your core values and create financial goals that align with them. After the workshop, you’ll have a clearer sense of how your values and goals connect to your spending, actionable steps toward achieving your goals and the tools to create a values-based spending plan.
2. Communicate openly with your friends
Discussing money openly with friends can help dismantle the shame around financial struggles and is a great way to explore affordable ways to spend time together. You might even be surprised to learn they're in the same boat.
Saying something as simple as, “I’d love to join but XYZ is outside of my budget this month,” is a great way to set boundaries without damaging your friendship. Remember, the ultimate BFF is someone who respects your relationship with money.
3. Use tools to help stay on track
Ally Bank’s Savings Account buckets can help you plan ahead by creating buckets based on your goals. Is there an annual friend trip in a few months? Or what about your bestie’s 30th birthday dinner? Create a bucket based on your upcoming commitments and set aside money each month until you reach your goal.
Or consider creating a values-based budget (like the one taught in Money + Values) makes it easier to say “yes” to what truly matters and plan for recurring social events or larger trips.
4. Plan low- or no-cost fun
Meaningful experiences with your friends don’t have to be expensive. Consider organizing a DIY craft night, hosting a karaoke party at home or attending free museum events or classes at your local library as inexpensive ways to spend time with your loved ones. Not only do these events cost less than a typical dinner out, they often create richer and more memorable moments.
5. Prioritize experiences over spending
When scheduling time with your friends, consider the “return on joy” and how spending money beyond your comfort zone can ultimately diminish the experience. If you’re worried about money while on a costly vacation, is it really worth it?
One helpful strategy to combat this feeling is the “two-out-of-three rule,” where for every three event invites, you choose two to attend based on money, energy and anticipated joy. This ensures you show up fully present and relaxed for the events that matter most.
Focus on the value of connection
By identifying and honoring your values and setting boundaries, you can enjoy the friendships that enrich your life without compromising your financial future.
