In the world we live in, social media can be found in almost everyone’s back pocket. With over 243 million Facebook users in the United States alone, social media has played a large part in building a world that is more connected now than ever but, that might affect us more than we realize— even our wallets!
So, how does social media affect our spending habits? We’ll explore 5 ways social media affects our wallets below!
1. FEAR OF MISSING OUT
While social media has many positive impacts, one of the downfalls is that many users only post "insta-worthy" content. While not intentional, we begin to view our world through an unrealistic lens - comparing our daily lives with others. Seeing photos of others living their best life, posting expensive dinners, and making reels featuring their latest tropical vacation makes us believe that we should be doing the same. But remember, social media is a highlight real! Not everything is at it seems on social media, as people post only what they want others to see.
So, you may be wondering how this impacts your wallet? Often without realizing it, as a result of comparison, we find ourselves purchasing things we see others have on social media in order to make their reality our reality. So, be cautious about comparing your life with the life of someone you see on social media.
2. EVERYONE IS A CONTENT CREATOR
Everyone has the ability to create and publish essentially anything they want to! With social media becoming the newest search engine, people are heading to social media to research and find information.
While there absolutely is fantastic financial education information available on social media, there is also bad financial education out there. Make sure to be cautious when taking advice from random creators on social media, and always fact-check any advice or information they may share so you don’t end up taking fiction for fact.
3. IN PLATFORM PURCHASES
These days, social media isn’t just a way to see photos and status updates from friends and family, but it’s an entire online commerce platform. With online marketplaces and stores specifically designed for social media, the ease of purchasing through a social platform is now bigger than ever! These social media purchases are convenient, but are they too convenient?
The ease of purchasing creates the perfect environment for impulse purchases and mindless spending that directly impacts the health of your wallet. Always think twice before hitting the “Confirm Purchase” button, referencing your budget to make sure you are respecting the money goals you put in place for yourself!
4. BUY NOW, PAY LATER
The rise of Buy Now, Pay Later platforms enables and encourages you to spend more money than you might have! These platforms often pop up during the check out process and have found their way into many marketplaces and online stores— including those found on social media platforms. Companies like Klarna, Afterpay, and Affirm give you the opportunity to break an online purchase down into payments, instead of paying the full amount at the time of purchase. Companies now have the ability to seamlessly offer these services through in-platform purchases, and even use the concept of breaking down a purchase in their advertising tactics.
While these payments may seem like a great idea, they may give you the comfort needed to spend more money than you have, as the immediate cost is much lower than the full price of the item. Always keep in mind that there will be real payments with real due dates and, if you’re unable to make a payment, it will affect your credit score!
For more information on Buy Now, Pay Later platforms, visit our article!
5. TARGETED ADS
Social media platforms have some really powerful advertising capabilities! These targeted ads are found more and more often throughout your scroll, and they’ve become extremely effective as they are typically very specific and show you products you are in the market for or interested in. While you can’t eliminate all ads, staying intentional with purchases and keeping your budget in the back of your mind is important to prevent unnecessary spending.
Social media isn’t all bad but there are some aspects of the platforms that may affect the way you think about and, ultimately, spend your hard-earned money! As you scroll, remember that everyone’s lives aren’t fancy dinners, luxurious trips, and all good, all the time. Reminding yourself of this truth can prevent comparison and a compromised budget. As you scroll, keep your budget and the goals you set for yourself in mind so you can avoid unnecessary spending and impulse purchases!