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Financial Problems that Follow Social Media & How to Avoid Them

Q: Every time I check my Instagram I see a friend showing off what they bought or posting pictures from the great vacation they’re having. How can they honestly afford to live like that?! Maybe I get so envious because we’re going through a bit of a rough time right now, but even when my husband’s hours pick up again, and I’m back at work from mat leave, there’s no way we’ll be able to live that kind of a lifestyle. What are we doing wrong? ~Angie

Social media contributing to financial problems and debt.A: Social media can bring people together with photos, events and like-minded groups, but unfortunately for some, it has become synonymous with “spend more.” As a whole, one of social media’s most recent criticisms is the ongoing competition it spurs on to keep up with the Joneses. That intense envy that comes from seeing only the best parts of everyone’s lives, what some have even termed the “highlights reel,” takes peer pressure pain to a whole new level.

Social media peer pressure affects people of all ages and from any walk of life. And feelings of envy don’t have to come from substantial spending; they can also be caused by someone receiving a lot of birthday wishes on their wall, a posted change in a friend’s relationship status, or seeing photos after an event you either didn’t go to or weren’t invited to.

Feeling peer pressure to spend and keep up with friends is nothing new – the difference with Instagram, Facebook, Pinterest, Twitter, and other social platforms is that now the peer pressure is instantaneous and continuous. In addition, the distorted reality that comes from only seeing the highlights that friends share, along with easy access to credit – it’s a recipe for disaster.

To protect yourself and your finances from social media peer pressure pain, here’s where you can start:


Budgeting tip

A recent university study discovered the number one emotion people experience on Facebook is envy. Other researchers have found a link between time spent on social networks and credit card debt. The more time people spent on social media, the more credit card debt they had. The researches attributed this to social media significantly lowering people's self-control.


Filter Your List of Friends

Purging contacts from social media accounts doesn’t come without its hazards, but sometimes you are who you associate with. Ideally you want friends, both in real life and online, who share your values and support your decisions. Many platforms now allow you to filter someone’s posts without un-friending them, which is a great way to save face while putting some distance between you and all of someone’s envy-inducing posts.

Do Online Friends Influence Off-line Decisions?

Does what happened online control, or at least significantly influence, what you do off-line? Maybe you snap a photo of what you want to buy to gauge a “friend’s” opinion. Or you only “check in” to places that garner a lot of likes and affirmations. Using your collective of “friends” to help you make financial decisions can be dangerous if you don’t share similar values and budgets.

Learn to live in the moment, not through the screen of your smartphone. Post less, be choosier with your online “friends,” set up separate accounts or profiles to separate your online friends from the off-line ones, and if all else fails – limit how much social media you consume.

Join Groups with Like-Minded Participants – Avoid the Fear of Missing Out

If you’re doing your best to live frugally because your household income has decreased, you’re paying off student loans, or saving up a down payment, seeing posts about what you’re missing out on by not spending more freely can make you feel very depressed and jealous. These feelings can wreak havoc on your budget and credit cards and can cause you to start rethinking your goals (the “what are we doing wrong”).

Instead, join groups and seek out online forums and friends who have chosen to live a lifestyle similar to yours. If you’re not sure where to start, search for websites on topics of interest, read blogs with rich comments sections, join geographically-close groups or communities with people you could get to know off-line, or subscribe to emailed newsletters with tips you can think about and learn from.

The True #NoFilter Image

When someone posts a #nofilter selfie showing off their tan, chances are they haven’t included a photo of the credit card bill from their tropical vacation. Filtering out the bill only shows how they spend their money, which isn’t the whole story. What does their true financial picture look like?

If you’re in your 20’s and you are getting used to financing your lifestyle with credit, you’re likely setting yourself up to continue this trend in your 30’s. By the time you’re in your 40’s, you could be facing bankruptcy and the serious consequences that come from years of being in debt, e.g. stress-related health concerns and children who don’t have good money skills. Come your 50’s and 60’s, forget about freedom 55 or retirement at 65; you’re looking at working at least part time for many more years.

Decide what’s more important to you: your bank account and the real life you live day-to-day, or the opinions of people you’ve never met and who have no stake in your happiness or success.

The Bottom Line on How Social Media Can Influence Over-Spending

Social media doesn’t just influence over-spending; it also exacerbates peer pressure and all of its negative effects. There’s nothing wrong with celebrating accomplishments, introducing a new bundle of joy to family on Facebook, or pinning bucket list travel destinations. Stick with friends who will celebrate with you for all the right reasons. Avoid buying into, literally and figuratively, perfectly staged lifestyles that are unaffordable and look too good to be true because they probably are.

Related topics:

How to Save More Money with Social Media

Common Money Mistakes to Stop Making in Your 30’s

Avoid Freedom 85 – Tips to Retire Debt Free

#ThrowbackThursday – What Can this Social Media Trend Reveal About Your Finances?


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