Trying to live up to your friends' standards can be a costly habit. In fact, it's sending a surprising percentage of millennials into debt.
That's according to a new report from Credit Karma, which found that "nearly 40 percent of millennials have spent money they didn't have and gone into debt to keep up with their peers." They're most likely to overspend on experiences, like going out with friends or taking vacations, Credit Karma notes.
"FOMO spending," or the modern-day version of "keeping up with the Joneses," is tempting. Respondents reported feeling uncomfortable saying "no" when a friend suggests an activity they can't afford.
But short-term spending habits can derail long-term planning, and many millennials are already struggling to hold onto money: A growing percentage have absolutely nothing saved at all.
There are a few things you can do to avoid the temptation of trying to live up to your friends' standards:
1. Dial back your use of social media. That's what helped one millennial, Derek Sall, pay off $116,000 worth of debt before age 30.
"The best tip I can give is just live your own life," he tells CNBC Make It. "The best way to just live simply and be content is just to turn it all off and hardly pay attention to it at all. Because that's what gets people in the most trouble. They see 'Oh, my friend went on this great vacation, and I wish we could do that!'"
2. Think through your purchases. "Question the things you're spending your money on," advises one millennial who accumulated $150,000 in savings by age 26. "Just because your friends enjoy spending lavishly on clothes, doesn't mean that's for you. … Don't waste money on things that aren't important to you."
3. Leave your plastic at home. Credit Karma found that more than half of millennials use credit cards to pay for their FOMO spending. If you're carrying a credit card balance, try ditching your plastic all together and going cash only.
Simply withdraw a predetermined amount of cash for the week and commit to spending only that amount. It'll force you to stay on budget.
Now, check out these helpful resources to start spending less and saving more
- 8 strategies for saving money from a couple that banked $50,000 last year
- After living on $60 a week for a month, here are my 7 best money-saving tips
- Here's how much money you should have saved at every age
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