Nearly 60% of millennials and Gen Zers say their social life is hurting their financial goals

Emmy, a 31-year-old living in Los Angeles, has been in a credit card debt cycle — racking up balances, paying a card off and then maxing it out again — since she was 18. 

When Emmy, who uses a pseudonym online to protect her privacy, started sharing her debt journey on TikTok in March, her total balanced exceeded $28,000.

"I know this is my fault," she tells CNBC Make It. "I was always the friend that'd be like, 'Shots on me,' or 'Oh, don't worry, I got it' or 'Just pay me next time,'" she says, adding that she wouldn't always follow up on requesting friends pay her back.

She's not alone. Nearly 60% of millennials and Gen Zers say their financial goals have been impacted by social spending, according to a new survey from Ally Bank.

Spending money on time with friends isn't necessarily a bad thing. In fact, "you're going to get the highest return on your well-being doing that," says Jack Howard, head of money wellness at Ally.

"But then we're getting into trouble, because we're finding that 42% of folks are overspending," she adds, citing the survey, which found that 42% of millennials and Gen Zers report overspending on their social budgets several months out of the year.

American adults seem to prioritize social time, with 69% of survey respondents saying they try to connect with their friends in-person at least once a week. And on average, they spend $250 a month on social activities, Ally found.

But few adults seem to properly budget for social spending. Just 18% of Gen Zers and millennials say they have a strict budget for activities with friends, Ally found.

"You gotta just put it in your budget," Howard says. "I think a lot of people just don't realize that cocktails with my girlfriends this day and brunch this day, and then I DoorDash with my partner another day, all of those expenses add up."

Look at money as "a tool to enhance your values and your experiences," Howard says.

Think deeply about your values and see if they are reflected in your spending, she says. If costly activities like going out to dinner or traveling with friends are important to you, you may have to make cuts in other areas of your life in order to prioritize them.

Outside of making budget adjustments to allow for more social spending, Howard also recommends finding cheap or free activities to do with your friends — something only 23% of millennials and Gen Zers say they prioritize, Ally found.

"What you really want is the experience. What you really want is the time with your friend," Howard says. "[We need to] really get back to the basics of understanding that we need these friendships to increase our well-being … but we don't want to overspend to where we're getting into financial trouble."

Emmy is working on "adjusting the language with my friends" to suggest free or cheaper hangouts as she focuses on paying down her credit card debt.

However, it's been difficult to make the change because she was so comfortable spending money with her friends, and they don't know about the level of debt she's dealing with, she says.

"I can confidently say that they would not judge me if they knew what I was doing, but I still just [have] the fear of being perceived by the people that you love," she says.

That kind of shame is common, Howard says, and can contribute to continued overspending. She recommends trying to identify where the feeling is coming from so you can better understand why you're inclined to say "yes" to things you may not be able to afford. It's a money mindset that often stems from how you were raised or something that happened in your early years, Howard says.

"Until you really connect that past to the present, you tend to do those things over and over again, which will show up not only in how you spend on yourself, but also in how you spend in your relationships with friends and family," she says.

If you're struggling to figure out how to better manage your money, consider working with a professional like a certified financial planner or a financial therapist who can offer guidance on your specific situation.

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