FOMO And the Rise of Social Media Induced Debt

Social media is a major influence on millennial debt and overspending.

Do you find yourself constantly logging in to your social media accounts to connect with your friends and see what they’re up to? You’re probably curious about what new foods they are trying, what new styles they are wearing, and where they are travelling to next, right? Maybe you are even overspending in order to be included in the experience and keep pace with their trends?

If you answered yes to any of these questions, you are far from alone.

A recent study conducted by Allianz Life found that close to 50% of millennials have gone into debt because of a Fear of Missing Out (FOMO) – and it’s no wonder!

Online, it looks like everyone is living the perfect life. Not only are influencers and celebrities posting pictures of their fancy meals, designer clothes, and exotic vacations, but so are your friends … and your friends of friends … and your friends of friends of friends (all emulating the lives of micro-celebrities).

Like moths to a flame, it is natural to be attracted to luxury and glamour. After all, people who can buy what they want (when they want to) must be happy, right? People believe this so much that the intense desire to have more money, gadgets, and life experiences also creates an equally intense fear of not having those things. And, in our modern age of digital convenience, it is easy to get what you want (when you want it) whether you can afford it or not.

Advertisers bank on this with targeted ads on social media that prey on your insecurities and influence you to spend more so they can feel included and connected to your peers – not just more of your own money, but often credit card debt (aka: money you don’t have) too.

According to the Allianz Life Study (2017):

  • 57% of millennials spent money they hadn’t planned to spend because of what they saw on their social media feeds.
  • 88% of millennials believe that being active on social platforms compels them to compare their wealth and lifestyle with others (versus 71% of Gen Xers and 54% of boomers).
  • 61% feel inadequate about their own life and belongings, based on what they see online.
  • 50% admit that they spend more money on going out than they do on rent or mortgage (yikes!).

It’s easy to get trapped in the endless cycle of overspending that is triggered by comparison, feelings of inadequacy, and FOMO. Once you’re in it, it may seem difficult to break the pattern – but, it’s not impossible!

Reduce the Influence of Social Media on Your Debt:

Prioritize your needs, wants and goals:

Make an outline of what is most important to you. Declare your goals, needs, and wants by listing them out on paper and putting them in order of priority (highest at the top). Put that list somewhere that you will see every day and then actually look at it everyday! This will train your brain to keep your goals and values front of mind when you’re making financial decisions.

Create a social budget to avoid overspending:

A social budget is essential for achieving modern money goals.

When it comes time to pull money out of that wallet, ask yourself: Is this purchase aligned with my goals and priorities? Do I really need it now or can it wait? Is there a way I can get it for free, second hand, or on sale? Is this how I want to spend my social budget? (put these questions on a post-it note and stick it to the largest bill)

If socializing and spending time with friends is important to you, establish a ‘social budget’ for the month and put money aside just for that. If you usually pay with debit or credit, consider having a separate wallet and fill it with cash specifically for your social spending (so you don’t have to remember how much you have left – it’s right there in front of you).

Do a social media audit:

Clean up your accounts by unfollowing pages, brands, and influencers that are not aligned with your goals and constantly barrage you with ads and images that make you feel inadequate, trigger you to spend money, or cause you to experience FOMO. Not only can this help you manage your finances, but you may also find that less exposure to bad influence is also helpful for managing your emotional state and overall wellbeing too.

Unsubscribe from newsletters, coupons, and deals:

Clean up your email accounts too! Unsubscribe from newsletters, coupons and deals that are sent to you by retailers. Being inundated by emails everyday (sometimes even twice a day) will tempt you to make unnecessary purchases. Doing a purge will also declutter your inbox, making it easier to stay on top of the communications that matter most.

At Spergel, we take a personalized approach to make sure we understand what you are going through. We will provide support throughout the entire process, beginning with the initial phone call or chat. The experiences of Cindy and Suzanne below are great examples of what you can expect.

Limit your time online

Sometimes it’s not enough to create a social budget to manage your cash – you may need to create a budget for your time too! Reduce your overspending by limiting your access to the prompts and instant opportunities that inspire you to go into debt. Start tracking how long you are online everyday (there’s an app for that!) and then create rules for yourself around how long and what specific times each day you will allow yourself to engage on your favourite social networks.

Farewell to FOMO

Millennial debt is on the rise. Is FOMO to blame?

While these tips will help you curb your spending moving forward (whether you’re a millennial or not), if you’re already off the deep end in debt because of fear-based financial decisions, you may need a more robust strategy to deal with the pile up of overspending related to social media influences from the past.

That is where the help of a Licensed Insolvency Trustee comes in.

For a FREE consultation, simply book a call with one of our LITs in the calendar below. They will carefully review your financial situation and show you options that just might turn your FOMO into JOMO (joy of missing out).