Posts tagged with "Credit Karma"

20% of guests go into debt to attend a wedding

May 21, 2019

It’s hard to say anything except “I will” when a friend or family member invites you to his or her “I dos.” But it often can be an inconvenient and costly obligation. In fact, according to American Express, the average wedding guest spends $592 per wedding, according to a recent report by Real Simple.

Considering the necessary wardrobe trappings, the travel, the accommodations, and the (often, multiple) gifts, attending nuptials—either as a member of the wedding party or a guest— can be expensive. And however much you want to say that money is no object when you are celebrating the happiness of people you love—you may (justifiably) worry that a one-day event isn’t worth going into debt.

And that happens more frequently than you would imagine. Indeed, a recent survey by Credit Karma of 1,039 Americans ages 18 and up found that about one in five Americans (20%) has gone into debt to attend someone else’s wedding —and 21% have gone into debt to fund their own marriage ceremony.

Millennials (born between the early 1980s and  2000) are the most prone to rack up debt as wedding guests—with 35% of millennial respondents having gone into debt to attend a bachelor or bachelorette party and 30% having gone into debt to attend a wedding.

By contrast, Gen Z (post-Millennials) spends the most on the ceremony—with 38% of respondents having gone into debt to finance their nuptials, Credit Karma says.

Why all the wedding-related debt? It could have to do with the social pressures and expectations set around weddings, the researchers found. Respondents cited feeling the need to impress friends and family (32%) as one reason they overspent on their own weddings, while others (20%) said they went into debt to make their wedding look good for social media.

Specifically, just how much debt are they racking up? Perhaps unsurprisingly, wedding-related debt is especially high for the couple throwing the wedding. A quarter of respondents (25%) who went into debt to pay for their wedding did so to the tune of $10,000 or more.

As for the attendees, more than a third of wedding guests and more than a third of bachelor/bachelorette party celebrants reported racking up more than $500 in charges.

How can both the guests and the bridal couple avoid going overboard? According to Credit Karma, the main reason people were able to avoid going into debt to attend a wedding was because the wedding was local (55%), meaning there would be fewer costs around things like hotels and plane tickets.

Other budget-friendly decisions: Choose wedding gifts you can actually afford (try splitting bigger-ticket items with other guests, if the couple’s registry allows), rent or rewear an outfit, stay at a friend’s home instead of at an hotel, and suggest budget-friendly bachelor/ette activities for the group.

Research contact: @creditkarma

Secret shame: When FOMO drives you into debt

April 10, 2018

Do you spend in response to social pressure or FOMO (fear of missing out)? Whether it is the cost of an after-work drink, a new outfit for a party, tickets to a concert, the latest smartphone, or an Uber ride, we all ante up in order to be “included” in the experiences of our closest groups of friends.

In fact, nearly 40% of Millennials have spent money they don’t have and gone into debt to keep up with their peers, based on findings of a poll of 1,045 U.S. adults conducted by Credit Karma/Qualtrics.

What’s more, they’re afraid to admit it.

When a friend suggests doing something they can’t afford, 27% of Millennials feel uncomfortable saying “no.” And out of the 39% of Millennials who’ve gone into debt to keep up with their friends, nearly three-quarters (73%) have kept it a secret.

What they may not realize is that some of their friends may feel the same way. Two-thirds of Millennials regret spending more on social situations than they had planned, and one-third (36%) doubt they’ll be able to sustain this lifestyle for another year without going into debt.

This is especially concerning given that Millennial Credit Karma members in the United States each already have $46,713 in debt on average. 

Specifically, what do Millennials spend on because they’re afraid to miss out?

  • Going out with friends and having a good time is one of the top types of FOMO spending, with nearly 60% buying food, while 33% buy alcohol.;
  • Fully 21% of Millennials admit they feel pressured to spend money they don’t have for parties or nightlife.
  • Four out of 10 Millennials who overspent to keep up with their friends made travel purchases. That could include a two-week vacation, a weekend trip with their significant other or a trip to attend a friend’s wedding.
  • One-quarter of Millennials who have spent too much to keep up with their friends purchased tickets to a music event, while 17 percent attended a sporting event.

But it’s not all about experiences. Many M feel pressured to buy items such as clothes (41%), electronics (26%), jewelry (18%) and cars (16%) even when they can’t afford them.

However, there is some good news: Credit Karma found that more than half of respondents seemed to have their FOMO spending habits under control. Fifty-three percent of Millennials say they make purchases they can’t afford to keep up with their friends no more than once a year, while 25% of respondents say they never make FOMO purchases.

But there’s room for improvement: 25% of Millennials who have a FOMO spend several times each year, while 21% of respondents admit to making these purchases at least once a month.

Credit Karma also looked at how much young Americans typically spend each weekend when they’re hanging out with their friends: Most (69%) spend $100 or less over a typical weekend; while 15% spend between $101 and $250; 16, more than $250; and 7%, more than $500.

These responses don’t account for differences in the cost of living across the country. So while $100 might be a lot to spend in some areas, it doesn’t go as far in other places.

According to Expatistan’s cost of living index, a fancy dinner for two would cost $119 in New York City compared to only $74 in St. Louis. And a cocktail out on the town would cost $16 in New York City but only $8 in St. Louis.

Finally, Credit Karma found that 78% of Millennials who responded have a budget, but 20% of them go over their budget on a monthly basis to keep up with their friends.

Research contact: @Greg-Lull