When you logged on to Facebook this morning, what did you see?
Your neighbor, showing off her new car?
Your best friend’s tropical vacation photos?
Another friend sharing the news that your favorite online shop is having a major sale?
And once you saw all of this, how did you feel?
If you are like many people, when you saw all of your friends’ fabulous things and experiences, you may have felt a pang of envy.
You might have even spent a few minutes pricing out your own fabulous vacation, or browsing an online store.
And if you are like many people, you might have even taken your daily internet time a step further, and pulled out your credit card and made an unplanned purchase.
Research shows that social media can wreak havoc on user’s finances, causing them to spend more and save less than they would if they weren’t using the networks. However, these studies show that the cause for the overspending isn’t always what you might think.
“I’ll Have What She’s Having”
At first glance, social media-induced spending is simply a matter of “keeping up with the Joneses.”
Without Facebook, you might not know that the guy from your freshman psych class just bought a new motorcycle, for example, and therefore might not feel the desire to purchase one yourself.
In many ways, Facebook is a platform for creating desire.
Given that so many people present the best possible version of themselves online, it’s easy to believe that all of your friends have fabulous homes, luxury cars and a closet full of designer clothing — and plenty of money in the bank.
It’s unlikely that they will share that they have thousands of dollars in credit card debt, or that the car is leased and their home needs a new roof.
At the same time that your friends are creating desire through their influence on you, they are also providing information. When your bestie posts a picture of a pair of shoes with a link to the store, she is making it easy for you to get them yourself — with a single click. Even without a link, when someone posts a photo or an update with an item you like, you can easily ask about it, and probably have it shipped to you by the end of the day.
Perhaps surprisingly, though, researchers have found that the bigger one’s social network, and the more involved one is with social media, the greater the influence that it has on spending — and not in a positive way. One study found that the people with the strongest social ties (meaning many close friendships online) actually had the most credit cards and highest debt levels of all users.
The researchers attribute this correlation to the fact that the people with more Facebook friends tend to have higher levels of self-esteem and self-confidence than others do, which in turn inhibits their self-control. In short, feeling well liked and supported allows people to feel like they can take more chances, which in turn can lead to overspending.
It’s Not All Bad
So does all of this mean that you should close your social media accounts and become a hermit when you’re trying to save money? Not at all. In fact, social media can actually help your finances, in a few ways:
- You can earn exclusive deals and discounts for liking or following your favorite brands.
- You can turn to your social network to find products or services that you need. For example, do you need a specific tool for a project around the house? Check with your Facebook friends to see if you can borrow one instead of buying.
- You can learn more about career opportunities within your industry, or connect with people who can help you move up the ladder or land a more lucrative job. Since most people don’t find jobs through employment listings, but rather by tapping into their networks of contacts, social media can be a vital part of your career strategy and keep you on the cutting edge of your industry.
The key, then, is understanding the effect that social media has on your spending, and learning to recognize your own patterns and triggers.
Remember that not everything on social media is what it seems, and that going thousands of dollars in debt to take an Instagram-perfect vacation isn’t going to move you toward your financial goals.
Sometimes, it’s best just to like someone’s photo or post and move on, no matter how much you think you’d like a new motorcycle.
Do you try to keep up with the Joneses?