You know Facebook is a black hole for your time. You hop on “just for a minute” or “just to check something” and next thing you know, an hour has passed.
It turns out the effects of social media isn’t just a time suck, though. It can also be bad for your finances.
If you spend a lot of time following your friends’ adventures, wishing you could eat fancy dinners and sit on sunny beaches, you could be on your way to overspending.
Facebook, Instagram, and Snapchat allow us all to stay connected to family and friends. We glimpse what’s going on in each others’ lives and might even feel closer as a result.
Just don’t let that feeling of connectedness turn into a financial disaster.
Negative effects of social media on your money
A recent survey conducted on behalf of the American Institute of CPAs (AICPA) discovered that 39 percent of U.S. adults with a social media account investigate a purchase or vacation after seeing others’ posts.
In today’s world, says AICPA, social media is the digital version of “keeping up with the Joneses.” And now there are a lot more of them.
You might feel like you need to keep up with someone else’s lifestyle so that you don’t feel “out of the loop.” Or, watching everyone have fun can make you feel as though you are missing out — and that’s a dangerous proposition for your wallet.
Even though I have a pretty great life, I sometimes feel major FOMO. Am I enjoying the “right” things? Could I be having more fun if I spent a little more money on something different?
These are all questions we ask ourselves. And the more time we spend on Facebook watching what our friends and family do, the more likely we are to spend money on things that aren’t part of the plan.
Are you short-changing yourself?
When I was in college, before the advent of Facebook, I ran up credit card bills trying to keep up with my friends.
We’d take regular trips to Las Vegas, see concert after concert, and eat out regularly. Later, I discovered that I wasn’t keeping up with my friends. I was keeping up with their debt.
If all the people you see on Instagram and Facebook are having a great time, you might be tempted to divert some of your financial resources so you can be a part of the fun.
And since social media is such a huge part of life, falling into that trap is even easier.
It can be hard to sock away money for retirement when you could be spending it on a vacation that rivals what you saw on a co-worker’s Instagram account last month.
Or, maybe watching your sister-in-law show-off the latest must-have gadget in Snapchat derails your plans to get rid of your credit card debt.
In fact, a few years ago, a study out of Germany found that Facebook users were more dissatisfied with their lives after seeing all the cool things posted by their associates on social media.
And if there’s one thing we know about feeling bummed out about life, it’s that it leads to poor financial decision-making.
How to stay on the right financial track
Don’t let the effects of social media derail your finances. These strategies can keep you from falling into a financial black hole.
Spend less time on social media.
I know my own satisfaction with life has improved since I started actively limiting my time on social media.
I’ve started relegating Facebook and Instagram to specific points in my day. Then I time myself.
Instead of spending time scrolling through Instagram pictures, looking over Pinterest projects, and reading Facebook status updates, I work on things that matter more to me.
Less time on social media means more time for me to practice the guitar or brush up on my German.
Don’t compare yourself to your friends.
For most of us, this is hard to do. As humans, we often use others as a measuring stick for our own lives.
However, you’re better off not getting caught up in the comparison game.
One of the biggest reasons is that you often choose to see the best parts of someone’s life. You’re probably comparing your bad day with their best day, which may not necessarily be the norm.
Remind yourself of your priorities and values.
When you feel yourself succumbing and reaching for that credit card, remind yourself of your goals.
You have your own priorities and values — and a timetable for achieving them. If making a purchase inspired by social media will interfere with what really matters to you, it’s a good idea to rethink the purchase.
Practice gratitude in your life.
Every now and then, write down what you love about your life. Regularly express thanks for what you have.
Practicing gratitude is a good way to reduce feelings of envy and to avoid the retail therapy that so often comes as a result.
Mitigate the effects of social media
Look, you don’t have to swear off social media altogether to save your finances. However, it’s a good idea to be aware of your triggers. And the reality of your own financial situation.
Remember to stay focused on your own financial goals and priorities. It’s totally fine to congratulate your friends on their latest purchases and vacations online. Just don’t feel like you need to follow in their (most likely expensive) footsteps later on.
Interested in a personal loan?Here are the top personal loan lenders of 2019!
|Lender||APR Range||Loan Amount|
|1 Includes AutoPay discount. Important Disclosures for SoFi.
2 Includes AutoPay discount. Important Disclosures for Payoff.
3 Important Disclosures for FreedomPlus.
4 Important Disclosures for Citizens Bank.
Citizens Bank Disclosures
5 Important Disclosures for LendingPoint.
6 Important Disclosures for LendingClub.
All loans made by WebBank, Member FDIC. Your actual rate depends upon credit score, loan amount, loan term, and credit usage & history. The APR ranges from 6.95% to 35.89%*. The origination fee ranges from 1% to 6% of the original principal balance and is deducted from your loan proceeds. For example, you could receive a loan of $6,000 with an interest rate of 7.99% and a 5.00% origination fee of $300 for an APR of 11.51%. In this example, you will receive $5,700 and will make 36 monthly payments of $187.99. The total amount repayable will be $6,767.64. Your APR will be determined based on your credit at the time of application. The average origination fee is 5.49% as of Q1 2017. In Georgia, the minimum loan amount is $3,025. In Massachusetts, the minimum loan amount is $6,025 if your APR is greater than 12%. There is no down payment and there is never a prepayment penalty. Closing of your loan is contingent upon your agreement of all the required agreements and disclosures on the www.lendingclub.com website. All loans via LendingClub have a minimum repayment term of 36 months. Borrower must be a U.S. citizen, permanent resident or be in the United States on a valid long term visa and at least 18 years old. Valid bank account and Social Security number are required. Equal Housing Lender. All loans are subject to credit approval. LendingClub’s physical address is: LendingClub, 71 Stevenson Street, Suite 1000, San Francisco, CA 94105.
†Per reviews collected and authenticated by Bazaarvoice in compliance with the Bazaarvoice Authentication Requirements, supported by anti-fraud technology and human analysis. All reviews can be reviewed at reviews.lendingclub.com
**Based on approximately 60% of borrowers who received offers through LendingClub’s marketing partners between January 1, 2018 to July 20,2018. The time it will take to fund your loan may vary.
7 Important Disclosures for Earnest.
8 Important Disclosures for Avant.
* The actual rate and loan amount that a customer qualifies for may vary based on credit determination and other factors. Funds are generally deposited via ACH for delivery next business day if approved by 4:30pm CT Monday-Friday. Avant branded credit products are issued by WebBank, member FDIC.
** Example: A $5,700 loan with an administration fee of 4.75% and an amount financed of $5,429.25, repayable in 36 monthly installments, would have an APR of 29.95% and monthly payments of $230.33
* Important Disclosures for Upgrade Bank.
Upgrade Bank Disclosures
** Accept your loan offer and your funds will be sent to your bank via ACH within one (1) business day of clearing necessary verifications. Availability of the funds is dependent on how quickly your bank processes this transaction. From the time of approval, funds should be available within four (4) business days.
|5.74% – 16.24%1||$5,000 - $100,000|
|7.46% – 35.99%||$1,000 - $50,000|
|7.99% – 35.89%*||$1,000 - $50,000|
|5.99% – 24.99%2||$5,000 - $35,000|
|5.99% – 29.99%3||$7,500 - $40,000|
|6.79% – 20.89%4||$5,000 - $50,000|
|9.99% – 35.99%5||$2,000 - $25,000|
|6.95% – 35.89%6||$1,000 - $40,000|
|6.99% – 18.24%7||$5,000 - $75,000|
|9.95% – 35.99%8||$2,000 - $35,000|