The millennial debt problem no one talks about

Over the past decade, Kate has attended 19 weddings, part of the bridal party for 12 of them. With the weddings have come expectations. There’s the matching dresses and shoes, of course, and the gifts. But there’s also been bridal showers, engagement parties, and traveling to the weddings themselves. Kate lives in California but grew up on the East Coast, so the trips aren’t quick.

And there are the bachelorette parties. The 31-year-old has traveled for at least seven of them, to popular destinations including Austin, Nashville, Palm Springs, and San Diego.

“I’ve hit all the biggies,” Kate jokes. Though she now earns around $70,000 per year working in a creative field and is a fairly fastidious budgeter, that wasn’t the case in her mid-20s. Then, she was more “financially irresponsible” while earning around $45,000 per year—less than many of her friends and certainly not enough to spend thousands of dollars on multiple weekend getaways a year.

Still, Kate, who asked that her last name be withheld so as not to offend any of her friends who might read this article, went, paying for the plane tickets, Airbnb stays, car rentals, celebratory dinners, and so on. She estimates she’s spent $18,000 on other peoples’ weddings and events over the years—with around $8,000 to $10,000 of that accruing into credit card debt.

Plenty of millennials can relate to Kate. As the generation has come of age, gotten married, had children, and turned 30 (and then 40), events like bachelorette parties, weddings, and even birthday parties have become more lavish and indulgent. What used to entail a night out and perhaps a limo ride has transformed into four-night stays across the country.

“If I look back at when my older friends, older siblings were in their mid-twenties, were they doing this? Absolutely not. They did not travel like this, did not have the expectation of doing all of this,” she says. “Even from the first wedding I went to 10 years ago to now, it’s a different expectation.”

A photo from Kate’s bachelorette trip to Palm Springs.

Courtesy of Kate

And for many, the expectations can lead to taking on debt. In fact, people in their thirties accumulated a record-high debt of over $3.8 trillion by the end of 2022—up 27% from 2019, according to the Federal Reserve Bank of New York. Much of that is mortgage debt. But another sizable portion is credit card debt, and it’s on the rise—millennials have an average credit card balance of $6,750, 26% higher than the average three years ago, the Wall Street Journal reported. Thirty-somethings also boast the highest rates of credit card delinquencies compared to any other age group, according to the New York Fed and Liberty Street Economics. 

Of course, birthday celebrations and over-the-top bachelorette parties aren’t to blame for an entire generation’s growing debt balance. Much of it can be attributed to factors beyond the individual millennial’s control, like the increasing cost-of-living, outrageous child care costs, massive student loan debt, rising credit card interest rates, and the fact that many are in the life stage of buying big ticket items like a house or a car. Millennials also aren’t the first to experience FOMO. But the social pressure they face to attend all these milestone events is real and the costs are growing, says Ted Rossman, senior analyst at Bankrate.

Experiential spending is more important to younger generations, and likely behind part of their growing indebtedness. Especially post-COVID lockdowns, demand for experiences—from Taylor Swift concerts to summer travel—has increased dramatically and has not subsided much yet. “It does seem to be a growing trend. There is something generational about it,” says Rossman, noting Gen Z is already facing the same spending pressures. “Young people love experiences.”

Yet, while it’s easy to commiserate over student loans or inflation, there’s something about not being able to afford your best friend’s birthday brunch that’s more difficult to put into words, says Kate. “Why did no one ever have the bravery to be like, ‘guys I can’t do this.’ This is not a good use of my money,” she says. “You didn’t want to be the only one. It’s very overwhelming in that sense.”

‘Am I the only one who can’t afford to be doing what I’m doing?’

Blame social media, says Kate. Between TikTok travelogs of destination bachelorettes and Instagram feeds filled with event recaps, there’s pressure to create and attend more and more once-in-a-lifetime events. “Everything has to be milked to the Nth degree for any milestone,” she says.

Still, while the highlight reels are made for some nebulous digital audience, the money they cost to produce is very real. While she had fun on the trips she’s been on, Kate has some regrets, mentioning how much further along her retirement savings could be if she attended fewer trips.

It’s easy, in theory, to say no to things you can’t afford. Less so when you want to be there for your friend, and doing so might highlight your own insecurities about your salary or spending habits. Kate wishes she pushed back more when she was younger.

“What felt the most stressful was the lack of conversation about it. Money is so hard to talk about, especially in your 20s,” Kate says. “God, does anyone else feel overextended by this? Am I the only one who can’t afford to be doing what I’m doing? Is anybody else stressed by this, or am I the one friend who can’t seem to get her finances in order?”

It’s easy to fall into the spending trap, she says, when it is as normalized as it has become. In some friend groups, it’s not so much a question of whether a bride will want to go on a weekend getaway for her bachelorette party, for example, but rather of where she wants to go, Kate says. (Of course, this statement does not and cannot apply to everyone—but pricey bachelorettes are on the rise.)

Discussing the ‘money of it all’

Bachelorette parties are perhaps the most visible example of the expectations, but Brinna Smith, 30, says they are starting to infiltrate simpler events, like neighborhood barbecues and minor holidays. She was taken aback recently when a friend dropped off gifts for Valentine’s Day; she wonders if she’s expected to reciprocate gift-giving for that holiday in the years to come.

Smith recently declined an invite to a wedding in the Philippines. While she would have loved to go, she couldn’t make the math work, especially with a toddler to take into consideration.

“As these kinds of social expectations change, everyone has a different experience of what is acceptable to them in their social circle, and that doesn’t always map back to your own,” says Smith. “You have to be quite tactful about saying no when that comes up. You don’t want to rain on that person’s parade for having whatever experience they’re planning.”

Brinna Smith, pictured with her child, recently had to say no to a wedding the Philippines for budgetary reasons.

Courtesy of Brinna Smith

One thing she does to mitigate costs is to buy gifts and cards when they’re on sale throughout the year. That can make attending birthdays—especially for her friends’ children—and other events more affordable.

Kate encourages other people to “not be afraid to be the person to discuss the money of it all.” Though it can seem scary, she says it is likely other members of the group feel the same way but haven’t mustered the courage to say something. If a friend takes offense or guilts you, “do an audit of your friendships,” Kate says. No one should be shamed by a real friend.

As she’s gotten older, Kate says the conversations around the events have changed. There’s less pressure to appear like you can afford to do everything.

“More recently, it is a discussion with the bride of, this is what will be covered, what are you comfortable spending,” says Kate. “That has been really nice. But we just didn’t have the language when we were 23.”

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