Young adults are experiencing financial strain and risking damaged relationships due to a phenomenon described as "payment avoidance," according to a new report. This behavior involves Gen Z consumers fronting money for group expenses like trips and events but refraining from asking for reimbursement due to fear of uncomfortable conversations.
Data from Zelle's 2026 Avoidance Economy Report indicates that 76% of Gen Z consumers who have paid for group expenses were not fully repaid. Furthermore, 55% reported that these financial issues created tension or negatively affected their relationships.
Financially, 47% of Gen Z individuals are reportedly in debt as a direct result of covering expenses for friends and family without being repaid. The rising cost of living, coupled with the expense of social events such as music festivals and major sporting events, exacerbates these financial pressures for individuals under 30.
Researchers define "payment avoidance" as a social behavior characterized by delaying, ignoring, or withdrawing from money-related conversations with loved ones. The report found that 48% of Gen Z consumers view delaying repayment as a form of avoidance, while 33% experience stress and anxiety when discussing money owed between friends.
The consequences of these disputes can be severe, with 19% of Millennials and 14% of Gen Z confessing to ending friendships or relationships over repayment disagreements.
"Delaying repayment can create a bigger problem than the debt itself," stated Traci Williams, a board-certified clinical psychologist and certified financial therapist, in the report. "What starts as a payment request can quickly turn into avoidance to temporarily reduce financial anxiety."
Digital payment tools are cited as a potential solution, with 80% of Gen Z individuals reporting successful reimbursement through such platforms. Fifty percent of users also credited these tools with reducing the awkwardness of direct financial discussions.
"Whether it's a group trip, a birthday dinner or tickets to a major event, Zelle helps people pay each other back quickly through their banking app," said Denise Leonhard, the company's general manager. "That speed and simplicity can make a meaningful difference when money is on the line between friends and family."