Don’t Let Facebook Ruin Your Finances: Avoid These Effects of Social Media

effects of social media

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.

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1 Includes AutoPay discount. Important Disclosures for SoFi.

SoFi Disclosures

  1. Terms and Conditions Apply: SOFI RESERVES THE RIGHT TO MODIFY OR DISCONTINUE PRODUCTS AND BENEFITS AT ANY TIME WITHOUT NOTICE. To qualify, a borrower must be a U.S. citizen or permanent resident in an eligible state and meet SoFi’s underwriting requirements. Not all borrowers receive the lowest rate. To qualify for the lowest rate, you must have a responsible financial history and meet other conditions. If approved, your actual rate will be within the range of rates listed above and will depend on a variety of factors, including term of loan, a responsible financial history, years of experience, income and other factors. Rates and Terms are subject to change at anytime without notice and are subject to state restrictions. SoFi refinance loans are private loans and do not have the same repayment options that the federal loan program offers such as Income Based Repayment or Income Contingent Repayment or PAYE. Licensed by the Department of Business Oversight under the California Finance Lender Law License No. 6054612. SoFi loans are originated by SoFi Lending Corp., NMLS # 1121636. (www.nmlsconsumeraccess.org)
  2. Personal Loans: Fixed rates from 5.49% APR to 14.24% APR (with AutoPay). Variable rates from 5.29% APR to 11.44% APR (with AutoPay). SoFi rate ranges are current as of December 1, 2017 and are subject to change without notice. Not all rates and amounts available in all states. See Personal Loan eligibility details. Not all applicants qualify for the lowest rate. If approved for a loan, to qualify for the lowest rate, you must have a responsible financial history and meet other conditions. Your actual rate will be within the range of rates listed above and will depend on a variety of factors, including evaluation of your credit worthiness, years of professional experience, income and other factors. Interest rates on variable rate loans are capped at 14.95%. Lowest variable rate of 5.29% APR assumes current 1-month LIBOR rate of 1.34% plus 4.20% margin minus 0.25% AutoPay discount. For the SoFi variable rate loan, the 1-month LIBOR index will adjust monthly and the loan payment will be re-amortized and may change monthly. APRs for variable rate loans may increase after origination if the LIBOR index increases. The SoFi 0.25% AutoPay interest rate reduction requires you to agree to make monthly principal and interest payments by an automatic monthly deduction from a savings or checking account. The benefit will discontinue and be lost for periods in which you do not pay by automatic deduction from a savings or checking account.

2 Important Disclosures for Citizens Bank.

Citizens Bank Disclosures

  1. Personal Loan Rate Disclosure: Fixed interest rates range from 5.99% – 16.24% (5.99% – 16.24% APR) based on applicable terms and presence of a co-applicant. Lowest rates shown are for eligible applicants, require a 3-year repayment term, and include our Loyalty and Automatic Payment discounts of 0.25 percentage points each, as outlined in the Loyalty Discount and Automatic Payment Discount disclosures. Subject to additional terms and conditions, and rates are subject to change at any time without notice. Such changes will only apply to applications taken after the effective date of change.
  2. Loyalty Discount: The borrower will be eligible for a 0.25 percentage point interest rate reduction on their loan if the borrower has a qualifying account in existence with us at the time the borrower has submitted a completed application authorizing us to review their credit request for the loan. The following are qualifying accounts: any checking account, savings account, money market account, certificate of deposit, automobile loan, home equity loan, home equity line of credit, mortgage, credit card account, student loans or other personal loans owned by Citizens Bank, N.A. Please note, our checking and savings account options are only available in the following states: CT, DE, MA, MI, NH, NJ, NY, OH, PA, RI and VT. This discount will be reflected in the interest rate and Annual Percentage Rate (APR) disclosed in the Truth-In-Lending Disclosure that will be provided to the borrower once the loan is approved. Limit of one Loyalty Discount per loan, and discount will not be applied to prior loans. The Loyalty Discount will remain in effect for the life of the loan.
  3. Automatic Payment Benefit: Borrowers will be eligible to receive a 0.25 percentage point interest rate reduction on their Citizens Bank Personal Loan during such time as payments are required to be made and our loan servicer is authorized to automatically deduct payments each month from any bank account the borrower designates. If our loan servicer is unable to successfully withdraw the automatic deductions from the designated account two or more times within any 12-month period, the borrower will no longer be eligible for this discount.
7.39% - 29.99%$1,000 - $50,000Visit Upstart
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5.25% - 14.24%$2,000 - $50,000Visit Earnest
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