Drinking habits are having an unprecedented effect on the younger generation’s financial health and vice versa, according to several new studies.
Alcohol to Blame
According to a new report by online lending marketplace LendingTree, Gen Z are increasingly blaming their drinking habits for their financial struggles, saying that drinking too much alcohol is stunting their financial growth.
Time, Money, Debt
Of the 2,000 respondents to the latest LendingTree survey, 45% expressed regrets over spending too much time and money on alcohol and parties. 17% reported that their boozy habits had even led to debt.
Gen Zers Vent on Drinking
And the most affected demographic of participants were Gen Zers, with 55% of young people surveyed reporting their overdrinking habits and 29% their struggles with drinking-related debt.
Hitting Them Where It Hurts
45% of Gen Z respondents felt that their drinking habits had hurt their financial situation overall.
Lower Rates Than Previous Generations
These results may come as a surprise to many, as Gen Z’s relatively low drinking rates compared to older generations have been much-discussed over the years.
20% Less Than Millennials
According to a 2023 report from industries and markets researcher Berenberg Research, Gen Zers drink 20% less per capita than their millennial counterparts did at the same age.
More Health Awareness
The explanation for this is believed to be an increased awareness of the negative health effects of drinking, such as heart disease, liver disease, memory issues, and more.
Learning the Consequences
But this latest report from LendingTree doesn’t disprove these findings.
Instead, it supports the idea that young people are drinking less because they have more information about both the health and financial impacts of drinking excess alcohol.
Harsh Financial Realities
With the increased cost of living, record-high inflation, and general economic instability in the last few years, young Gen Z adults have had to face a harsher financial reality than older people did at their age.
Debt Threats
As such, they are the demographic most likely to go into debt because of alcoholism due to inflation. And many of them are still chasing the years of socialization that they lost during the pandemic.
Still Learning
“Especially with the years that Gen Z lost to the pandemic, this age group wants to go out and have fun, and many have not thought about mindful or moderate approaches to alcohol, which can save them money,” said Nick Allen, the founder of alcohol-tracking app Sunnyside.
More Financial Awareness
Their anxiety around drinking alcohol doesn’t necessarily mean they drink too much, it simply means that it takes more of a toll on their savings and they are now becoming aware of that, according to LendingTree chief credit analyst Matt Schulz.
Lessons for the Youth
It can also partially be explained by their youth – the younger they are, the more inclined they might be to drink and party, and the less financial resources they will have to sustain those habits.
Less Wiggle Room for Partying
“They likely don’t have the financial wiggle room in their budgets that their older counterparts might have,” Schulz said.
“They haven’t yet reached their prime earning years, so they’re taking home less money and probably don’t have the savings cushion that others might have.”
Cutting Back and Quitting
And with the added financial stress, many are looking to cut back on their alcohol consumption in the coming year, according to the report.
Gen Z Giving Up the Bottle
37% of drinkers surveyed reported their plans to either quit drinking or significantly cut back in 2024. And unsurprisingly, Gen Z is also overrepresented in these statistics.
Other Sources Confirm It
53% of Gen Z respondents reported similar plans, compared to 47% of millennials.
This is supported by other sources, including marketing company NCSolutions, who reported that 61% of Gen Zers had the same plans.
Manifesting in Different Ways
And the financial burden of drinking has also affected Gen Z consumption habits in more subtle ways, including when and where they drink.
Home Is Where the Bar Is
New research by the wine company Unshackled Wines surveyed 2000 young adults in the US between the ages of 21 and 26 and found that 66% would rather drink at home than at a bar or event, where alcohol often costs 2 or three times the price tag for store-bought drinks.
“No Budget for Booze”
“Alcohol tends to be pretty expensive,” said Schulz. “When inflation rises and interest rates spike, there may not be as much room in the budget for booze.”
The post first appeared on Career Step Up.
Featured Image Credit: Shutterstock / Viktoriia Hnatiuk.
The content of this article is for informational purposes only and does not constitute or replace professional financial advice.
