Gen Z owe friends as group expenses create repayment stress
A Zelle report finds many Gen Z consumers owe friends or family large sums after covering trips, tickets and other shared costs.
By Maya Lindqvist · Senior Technology Correspondent
3 min read
Gen Z owe friends and family sizable amounts after shared plans, according to a new Zelle report, raising stress around group trips, events and repayment. Zelle said 46% of Gen Z respondents currently owe friends or relatives more than $1,000, while 30% owe at least $2,500.
The report also found that 47% of Gen Z respondents have taken on debt to pay for a group cost they thought others would repay. Zelle compared that with 13% of Boomers who said the same.
The findings come from two online surveys cited by Zelle: one of 1,000 U.S. consumers 18 and older, and another of 1,000 frequent Zelle users, defined as people who use the service at least four times a month. Zelle said Gen Z reported the highest spending on major shared events, with 37% saying they spend more than $2,500 per person on concerts, sports, group travel and similar plans.
Why do Gen Z owe friends after group expenses?
Dr. Traci Williams, a clinical psychologist and financial therapist, told Fortune that repayment problems often begin because friends do not agree on payment terms before someone pays. She said the organizer or person willing to book the trip can end up responsible for the bill when expectations are left unstated.
Williams said money discussions can feel awkward among close friends and relatives, which can lead people to assume they will be repaid without confirming when or how. Her advice, according to Fortune, is to make the arrangement clear before the expense is charged.
Zelle’s report found that repayment is often slow. Among people who borrow for shared expenses, 28% said they repay right away. For Gen Z specifically, 18% said repayment can take up to a month, 10% said two to six months and 11% said more than six months, according to Zelle.
What is payment avoidance?
Zelle described “payment avoidance” as delaying, ignoring or backing away from money conversations instead of addressing what is owed. The report said 20% of Gen Z respondents who owe money have muted or ignored a group chat to avoid repaying someone, and 7% have stopped spending time with the person they owe.
Williams told Fortune that distraction and discomfort both play a role. She said people may spend quickly, then postpone the follow-through required to reimburse a friend or relative.
The report linked repayment problems to emotional strain. Zelle said 82% of Gen Z respondents reported stress or anxiety from owing money, compared with 71% of all respondents and 64% of Boomers. Being owed money also caused stress for 59% of Gen Z respondents and 46% of Boomers, according to the report.
Relationships can suffer as well. Zelle said 69% of Gen Z respondents reported that repayment issues had affected a friendship, family relationship or romantic relationship, while 14% said a repayment dispute had ended a friendship. Millennials reported a higher figure on that measure, with 19% saying repayment problems had ended a friendship.
Digital payment tools may reduce delays, according to Williams. Zelle said 76% of frequent users reported paying people back faster after adopting the app, including 86% of Gen Z frequent users. Williams also told Fortune that friends may have different attitudes about money, and said groups should try to understand those differences before shared costs create conflict.
This story draws on original reporting from Fortune.