Is Social Media Ruining Your Finances?May 12, 2020
Due to the coronavirus pandemic and shelter-in-place restrictions, people are spending more time on social media than ever.
While social media can be a fun way to pass the time, it can have a negative impact on your finances. According to Schwab’s 2019 Modern Wealth Index Survey, more than a third of Americans said their spending habits were influenced by images and experiences shared on social media. Regularly using social media could cause you to overspend and put your financial goals at risk.
If your social media use is damaging your finances, here’s how to take back control.
Signs your finances are getting derailed by social media
Using Snapchat, Instagram, or TikTok isn’t necessarily a bad thing. It’s all about moderation. But there are some tell-tale signs that your social media use is hurting your bank account:
1. Falling for FOMO
Seeing friends and old classmates’ vacation photos can give you a severe case of FOMO— fear of missing out. Those glamorous photos can cause you to want to book your own expensive trip.
However, you should know that few people can really afford those exotic vacations. According to BankRate, the average person spends less than $2,000 per year on vacations. The Federal Reserve reported that 40% of Americans can’t cover a $400 emergency expense, so a pricey vacation — or even a weekend trip to the beach — is out of reach for many.
While some people may save for months or years to pay for their vacations, many more turn to credit cards to finance their trips. Chasing their lifestyles could damage your bank account.
2. Believing in the fantasy
With so many people posting beautiful photos of lavish purchases, it’s easy to believe that everyone is living a more luxurious life than you. But what you see on social media isn’t always real life.
You have no idea how people are paying for those luxuries. They could be well off, or they could be in extraordinary debt.
One well-known influencer racked up $10,000 in credit card debt to keep up her Instagram persona, filling her feed with pictures of dinners out, new outfits, and online purchases. And companies exist that allow users to hold fake private jet photo shoots.
Take the photos you see with a grain of salt and don’t compare yourself to others.
3. Purchasing on impulse
Social media ads are incredibly targeted; they’re based on your search history and likes, so you’ll likely see ads for products that will appeal to you. In fact, a 2019 survey from VidMob found that one-third of Instagram bought an item directly from an Instagram ad.
With one-click purchases and saved credit card information, it’s easy to make a purchase in an instant before you can really think it through.
If you find yourself making purchases while scrolling through your social media feeds, you may be wasting money.
How to stay on track
If your social media use is compromising your finances, use these five tips to get back on track:
1. Limit your screen time
While it may seem difficult during shelter-in-place orders, set limits on how much time you spend on social media. You can use your phone’s screen time settings to see how much time you currently spend on your phone. Use apps like Moment, Freedom, and SelfControl to limit your social media access.
2. Keep visual representations of your goals in front of you
To combat visuals of vacations and other purchases, keep visuals of your goals handy. For example, if you’re paying down student loan debt, keep a visual graph of your progress on your phone or saved to your computer desktop.
If you plan on buying a home or a car, keep a picture of your dream purchase saved. You can also create a Pinterest vision board of what your goals are to help keep you focused.
After all, taking control of your finances can help you live lavishly once your debt is repaid.
3. Set a waiting period before making any purchases
Institute a waiting period before making any purchases to curb impulse buys. Make yourself wait 72 hours before making a purchase.
If you see an item you want, save it. If you still want the product three days later, you can give yourself permission to buy it.
You may find that you completely forget about it, or that it’s less appealing after a few days. By making yourself wait, you can ensure that your purchases are things you really want and need.
4. Curate your feeds
Social media can be fun, but it can also make you feel bad about yourself and your life. To combat those problems, spend some time eliminating feeds and unfollowing accounts that make you feel inadequate, and only follow accounts that make you happy.
Feeds that feature cute dogs? Follow! Home decor feeds with throw blankets and lamps that cost more than your rent? Unfollow.
5. Practice gratitude
Researchers have found that focusing on things that you are thankful for is proven to make you happier. Every day or at least once a week, set aside some time to jot down things you are grateful for that happened during the week.
They don’t have to be big things. Cooking an especially tasty dinner, being able to spend time binging Netflix with a friend or partner, walking your dog, or still having a paycheck during a difficult economic period are all things to be thankful for right now.
By focusing on the good things that are already in your life, you’re less likely to be affected by FOMO and social media’s influence.
Managing your money
Using social media can be a great way to connect with friends and family and pass the time, but it can negatively impact your finances. But by using these tips, you can combat its effects and manage your money.
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