Bleak spending trend pushing 6.3 million Aussies to the brink: 'Drowning in debt'

Millions of Aussies are spending far beyond their means simply because they feel like they have to. New research from Finder has revealed the pressures many people are under just to keep up their social status.

The data showed that 30 per cent of respondents – equivalent to 6.3 million people – have recently been pressured into making a purchase to match the lifestyle of a friend or family member. Emily Wallace from Wallace Advocates told Yahoo Finance that many across the country want everything all at once.

"The holidays, the right clothes, the skincare... like everything," she said.

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The buyer's advocate said she's had many clients come in recently looking for a home that is way out of their price range just to show off.

"I think it's probably an image of what they should be buying, and whether that's influence from social media or peers or family," she explained.

But this "Keeping up with the Joneses" spending trend isn't confined to major purchases like a home.

Only 5 per cent of respondents said they bought a property because they felt pressured by others.

The most common act in the trend was splitting an expensive restaurant bill despite ordering less, with 14 per cent of respondents admitting to it. That was followed by going on an expensive holiday (11 per cent) and buying tickets to an event (10 per cent).

Finder found that one in eight - more than 3.1 million people – had gone into debt or spent more than they could afford because of the pressure to spend.

Avoid feeling pressured to give your finances a break

Sarah Megginson, personal finance expert at Finder, said this new spending trend can be fuelled by social media, where it seems like everyone is living the high life except for you.

"Never before have we had such an intimate and behind-the-scenes view into other people’s lives – but it’s important to remember it’s a highlight reel," she said.

“The millionaire next door might be drowning in debt to afford that apparent life of luxury.”

She's urged Aussies to stop comparing themselves to others and live within their own means.

“Everyone has different incomes and different priorities in life, but sometimes we’re not as intentional with our spending as we would like to be," she added.

“As a result, people are putting themselves in financial jeopardy, with some even taking on debt they can’t afford to ‘keep up with the Joneses’.

“Some people care deeply about how they appear and what the perception about them is, which can lead to some very unwise spending.”

How to stop overspending to keep up with others

• Check your finances: You might not even know you're overspending during nights out with friends at restaurants or gigs. Have a look at what you're spending and if there are ways to cut it down or cut it out completely if you want to improve your finances.

• Share your money goals: In the age of financial transparency, it can help to let your loved ones know where you're at financially and that might prevent you from falling into the trap of overspending. If those closest to you are aware that you're trying to save, they might help you get there.

• Suggest budget-friendly alternatives: If everyone in the group is keen on hanging out, then suggest somewhere that doesn't break the bank or capitalise on happy hour specials or daily meal deals at certain restaurants or pubs. If it's a holiday, then look for flight and hotel deals to keep spending low.

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