Gen Z Owes Friends Over $1,000 on Average

A significant portion of Generation Z is accumulating substantial debt due to group expenses, with nearly half owing friends and family more than $1,000. A new report from Zelle, a digital payments network, indicates that 46% of Gen Z individuals currently owe over $1,000 to people they know, and a notable 30% of this demographic owes $2,500 or more. This financial strain is exacerbated by the fact that 47% of Gen Z respondents have incurred debt to cover shared group expenses, with the expectation of being reimbursed. This contrasts sharply with older generations, as only 13% of Baby Boomers reported similar debt for group expenses.

Dr. Traci Williams, a clinical psychologist and financial therapist, explained to Fortune that the reluctance to settle debts often stems from discomfort in discussing money with close acquaintances. This discomfort can lead to a lack of clear payment arrangements before expenses are incurred. She highlighted that the individual organizing the event or trip frequently ends up bearing the brunt of the cost when repayment terms are not explicitly agreed upon beforehand. Dr. Williams emphasized the importance of making expectations clear and engaging in open conversations about financial arrangements to mitigate these issues.

The Zelle report is based on findings from two separate online surveys. The first survey encompassed 1,000 U.S. consumers aged 18 and older, while the second surveyed 1,000 "super-users," defined as individuals who utilize Zelle at least four times per month. When examining spending habits across different generations, the survey found that Gen Z spends more on major group events than any other age group. Specifically, 37% of Gen Z individuals reported spending over $2,500 per person on events such as concerts, sporting events, and group trips, which represents the highest percentage among all age cohorts.

Despite higher spending, repayment timelines for these shared expenses lag significantly. The survey indicates that only 28% of individuals who borrow money for shared expenses report repaying the amount immediately. Among Gen Z respondents, the repayment period extends considerably, with 18% stating it takes up to a month to repay, 10% indicating a timeframe of two to six months, and an additional 11% reporting that it takes longer than six months to settle their debts. This prolonged repayment cycle contributes to the growing financial burden and potential strain on personal relationships within this generation.