Many of us wish we spent less time staring at our phones, scrolling through Instagram or checking for updates on Facebook. If you haven’t successfully limited your social media usage yet, this finding might help: According to Charles Schwab, social media can be terrible for your budget.
In its 2019 Modern Wealth Survey, Charles Schwab examined the effects of social media on Americans’ spending habits. It found that the majority are spending more money thanks to the images and experiences they see online, with millennials and Gen Zers being influenced the most.
Social media is draining your bank account
Charles Schwab’s survey found that perfectly-curated Instagram feeds aren’t just making us worry about missing out; they’re causing us to overspend, too. According to the survey, more than roughly 1 out of 3 respondents — 34% — said social media has influenced them to spend money on experiences. The stats were even higher among millennials at 49% and Gen Zers at 44%.
Shoppers can’t necessarily afford what they’re buying, either. Among respondents, 48% of millennials and 41% of those in Gen Z said they’d bought something they couldn’t afford because of the influence of social media.
Social media users aren’t just spending money based on ads. They’re influenced to spend because of the images they see on their friends’ social feeds. More than half of respondents (57%) said they pay more attention to what their friends are spending as opposed to what those friends are saving.
“Social media can be bad for your budget simply because you see those you admire, and even your friends, buying fancy bags, clothes, driving gorgeous cars, going on luxurious high-end vacations, all while taking selfies and showing off unsustainable high-spend habits that inspire you to copy and do the same to fit in,” said marketer Stacy Caprio, who blogs at DealsScoop, an online discount marketplace.
“Even when your friends and those social accounts you follow aren’t trying to get you to buy something or explicitly running an ad, seeing the lifestyle of those around you may cause you to start spending a lot more to keep up than you would have if you had not been scrolling through your social media.”
People have always felt the pressure to “keep up with the Joneses.” But with thousands of friends and influencers to compare yourself to at all hours of the day, it’s no wonder many people are spending beyond their means.
How to save your budget from social media splurges
So how can you resist the temptation to overspend that comes with social media? Here are some expert tips for saving your wallet — and unplugging from your phone while you’re at it.
1. Design a realistic budget
Without having a clear sense of your income and expenses, it’s impossible to know whether or not you’re overspending. So take the time to design a budget that tracks your monthly cash flow.
Use a simple Excel spreadsheet to record your income and expenses, or make the most of a budget-tracking app such as Mint or YNAB. Break down your spending into major categories, perhaps leaving a small amount for social media-inspired purchases.
But once you’ve hit that limit, don’t keep shopping — no matter how strong the urge to swipe up on an Instagram ad might be.
2. Limit your social media usage
The more time you spend on social media, the more you’ll be tempted to spend money. By limiting your time on these sites, you might find yourself less inclined to buy new products or book experiences you hadn’t thought about before seeing them on your feed.
“Limit your screen time, only open the social media apps two to three times a day and don’t aimlessly scroll through when you’re bored,” advised Tom Buckland, owner of HQ SEO & Ghost Marketing, two companies that focus on digital marketing. “The ability to swipe up on Instagram has eradicated the time from ‘eye to buy’ — meaning before you know it, that expensive mascara you don’t need is on its way from the factory floor to your door in no time.”
Having created social media ads for clients, Buckland knows how to persuade customers to make a purchase on social media before they know it. So he urges budget-conscious consumers to limit their screen time to protect themselves from all the strategic marketing moves going on behind the scenes.
3. Wait 24 hours before you click buy
When it comes to overspending, we’re often at the mercy of our emotional triggers. Maybe you see a product that promises a solution to a problem you’ve been dealing with, or you’re shopping to make yourself feel better after a tough day.
“If you see an ad [for] a product you like, assess your current mood before making a purchase,” he suggested. “If you are purchasing the product because it makes you feel better, or if you are very happy when you see the ad, give yourself 24 hours before making the purchase. Within this time, your emotions would have stabilized, and you will be able to make rational decisions.”
By waiting 24 hours — or a week, or even a month — you might find the urge to buy has disappeared. And remember, marketers want to create a sense of urgency so you buy fast, but that product you’re looking at probably won’t run out overnight.
4. Delete credit card information to prevent “one-click shopping”
If you’ve got your payment information saved online, it’s all too easy to hit “buy” without giving it much thought.
“With one-click shopping and credit cards, it’s really easy to overspend on impulse,” said Dan Hinz, financial coach behind Adulting With Money.
Even though saving your credit card information feels convenient, it makes it very easy to shell out money online. By deleting those details from your accounts, you’ll force yourself to pause and think about whether or not you really want to hit buy.
5. Remember that you’re watching a highlight reel
In the Charles Schwab survey, 72% of millennials and 74% of Gen Zers reported wondering how their friends can afford the experiences they post on social media. But when scrolling through Instagram or Facebook, it’s important to remember you’re looking at a highlight reel, not a complete representation of someone’s life.
“Social media does not reflect reality,” said Miguel A. Suro, attorney and lifestyle journalist at personal finance, lifestyle and travel blog The Rich Miser. “Rather, people tend to post the best and most exciting moments in their lives. This can set an unrealistic standard; for example, it can make it look like someone is always traveling, dining or partying, when in reality that’s not the case.”
So when you’re scrolling, remember that you’re simply looking at a curated collection of glamorous moments, and not the full picture of someone’s life or finances.
6. Keep in mind the ads you see are highly targeted
Along with photos of your friends’ vacations and dining experiences, you might also get bombarded with ads. If they seem perfectly tailored to your interests, that’s because they are.
“Facebook and Instagram will let you target based on a combination of gender, age, location, education level, relationship status and more,” said Suro. “If you’re seeing an ad, it’s probably because you’re part of a very specific demographic the advertiser wants to reach.”
After seeing a hyper-targeted ad, you might feel compelled to reach for your credit card. But if you had no prior intention of buying the product, it’s probably more of a want than a need.
7. Don’t forget influencers are trying to sell you things
Big companies are relying on influencers more and more as part of their marketing efforts, and for good reason. Social media influencers are skilled at gaining a following and using their popularity to sell products.
“[There are] many paid influencers who are not always fully transparent as to their brand relationships,” said Suro. “These folks are paid to advertise products in a way that makes it seem like they use those products in their everyday lives, when in reality they may have just worn something briefly for a photoshoot.”
Many of these influencers also use professional photographers to get the perfect shot.
“It’s not casual smartphone photography,” Suro added. “In fact, some even do several photo sessions in a single day wearing different outfits, and then post them over weeks or months to make it seem as though that is how they regularly live.”
Rather than getting a glimpse into someone’s life, you’re probably just seeing a well-designed marketing campaign designed to get you to spend money.
Taking back control of your spending habits
The Charles Schwab survey reports 59% of Americans living paycheck-to-paycheck and 44% carrying credit card debt, so it’s important to take a look at our spending habits and make improvements when we can.
“The first step is being aware that social media is having an effect on your spending habits,” said Kelan Kline, co-founder of The Savvy Couple, a personal finance blog. “Then, take the time to address and prevent it from happening.”
If you’re on Facebook or Instagram, social media could be breaking your budget without you even knowing it. So take a look at how social media might be impacting your shopping habits, and take these steps to take back control of your budget.
Interested in refinancing student loans?Here are the top 7 lenders of 2019!
|Lender||Variable APR||Eligible Degrees|
|Check out the testimonials and our in-depth reviews!
1 Important Disclosures for Earnest.
To qualify, you must be a U.S. citizen or possess a 10-year (non-conditional) Permanent Resident Card, reside in a state Earnest lends in, and satisfy our minimum eligibility criteria. You may find more information on loan eligibility here: https://www.earnest.com/eligibility. Not all applicants will be approved for a loan, and not all applicants will qualify for the lowest rate. Approval and interest rate depend on the review of a complete application.
Earnest fixed rate loan rates range from 3.45% APR (with Auto Pay) to 6.99% APR (with Auto Pay). Variable rate loan rates range from 1.81% APR (with Auto Pay) to 6.49% APR (with Auto Pay). For variable rate loans, although the interest rate will vary after you are approved, the interest rate will never exceed 8.95% for loan terms 10 years or less. For loan terms of 10 years to 15 years, the interest rate will never exceed 9.95%. For loan terms over 15 years, the interest rate will never exceed 11.95% (the maximum rates for these loans). Earnest variable interest rate loans are based on a publicly available index, the one month London Interbank Offered Rate (LIBOR). Your rate will be calculated each month by adding a margin between 1.82% and 5.50% to the one month LIBOR. The rate will not increase more than once per month. Earnest rate ranges are current as of November 6, 2019, and are subject to change based on market conditions and borrower eligibility.
Auto Pay discount: If you make monthly principal and interest payments by an automatic, monthly deduction from a savings or checking account, your rate will be reduced by one quarter of one percent (0.25%) for so long as you continue to make automatic, electronic monthly payments. This benefit is suspended during periods of deferment and forbearance.
The information provided on this page is updated as of 11/06/2019. Earnest reserves the right to change, pause, or terminate product offerings at any time without notice. Earnest loans are originated by Earnest Operations LLC. California Finance Lender License 6054788. NMLS # 1204917. Earnest Operations LLC is located at 302 2nd Street, Suite 401N, San Francisco, CA 94107. Terms and Conditions apply. Visit https://www.earnest.com/terms-of-service, email us at email@example.com, or call 888-601-2801 for more information on our student loan refinance product.
© 2018 Earnest LLC. All rights reserved. Earnest LLC and its subsidiaries, including Earnest Operations LLC, are not sponsored by or agencies of the United States of America.
2 Important Disclosures for SoFi.
3 Important Disclosures for Laurel Road.
Laurel Road Disclosures
Laurel Road is a brand of KeyBank National Association offering online lending products in all 50 U.S. states, Washington, D.C., and Puerto Rico. Mortgage lending is not offered in Puerto Rico. All loans are provided by KeyBank National Association.
ANNUAL PERCENTAGE RATE (“APR”)
There are no origination fees or prepayment penalties associated with the loan. Lender may assess a late fee if any part of a payment is not received within 15 days of the payment due date. Any late fee assessed shall not exceed 5% of the late payment or $28, whichever is less. A borrower may be charged $20 for any payment (including a check or an electronic payment) that is returned unpaid due to non-sufficient funds (NSF) or a closed account.
For bachelor’s degrees and higher, up to 100% of outstanding private and federal student loans (minimum $5,000) are eligible for refinancing. If you are refinancing greater than $300,000 in student loan debt, Lender may refinance the loans into 2 or more new loans.
ELIGIBILITY & ELIGIBLE LOANS
Borrower, and Co-signer if applicable, must be a U.S. Citizen or Permanent Resident with a valid I-551 card (which must show a minimum of 10 years between “Resident Since” date and “Card Expires” date or has no expiration date); state that they are of at least borrowing age in the state of residence at the time of application; and meet Lender underwriting criteria (including, for example, employment, debt-to-income, disposable income, and credit history requirements).
Graduates may refinance any unsubsidized or subsidized Federal or private student loan that was used exclusively for qualified higher education expenses (as defined in 26 USC Section 221) at an accredited U.S. undergraduate or graduate school. Any federal loans refinanced with Lender are private loans and do not have the same repayment options that federal loan program offers such as Income Based Repayment or Income Contingent Repayment.
All loans must be in grace or repayment status and cannot be in default. Borrower must have graduated or be enrolled in good standing in the final term preceding graduation from an accredited Title IV U.S. school and must be employed, or have an eligible offer of employment. Parents looking to refinance loans taken out on behalf of a child should refer to https://www.laurelroad.com/refinance-student-loans/refinance-parent-plus-loans/ for applicable terms and conditions.
For Associates Degrees: Only associates degrees earned in one of the following are eligible for refinancing: Cardiovascular Technologist (CVT); Dental Hygiene; Diagnostic Medical Sonography; EMT/Paramedics; Nuclear Technician; Nursing; Occupational Therapy Assistant; Pharmacy Technician; Physical Therapy Assistant; Radiation Therapy; Radiologic/MRI Technologist; Respiratory Therapy; or Surgical Technologist. To refinance an Associates degree, a borrower must also either be currently enrolled and in the final term of an associate degree program at a Title IV eligible school with an offer of employment in the same field in which they will receive an eligible associate degree OR have graduated from a school that is Title IV eligible with an eligible associate and have been employed, for a minimum of 12 months, in the same field of study of the associate degree earned.
The interest rate you are offered will depend on your credit profile, income, and total debt payments as well as your choice of fixed or variable and choice of term. For applicants who are currently medical or dental residents, your rate offer may also vary depending on whether you have secured employment for after residency.
The repayment of any refinanced student loan will commence (1) immediately after disbursement by us, or (2) after any grace or in-school deferment period, existing prior to refinancing and/or consolidation with us, has expired.
POSTPONING OR REDUCING PAYMENTS
After loan disbursement, if a borrower documents a qualifying economic hardship, we may agree in our discretion to allow for full or partial forbearance of payments for one or more 3-month time periods (not to exceed 12 months in the aggregate during the term of your loan), provided that we receive acceptable documentation (including updating documentation) of the nature and expected duration of the borrower’s economic hardship.
We may agree under certain circumstances to allow a borrower to make $100/month payments for a period of time immediately after loan disbursement if the borrower is employed full-time as an intern, resident, or similar postgraduate trainee at the time of loan disbursement. These payments may not be enough to cover all of the interest that accrues on the loan. Unpaid accrued interest will be added to your loan and monthly payments of principal and interest will begin when the post-graduate training program ends.
We may agree under certain circumstances to allow postponement (deferral) of monthly payments of principal and interest for a period of time immediately following loan disbursement (not to exceed 6 months after the borrower’s graduation with an eligible degree), if the borrower is an eligible student in the borrower’s final term at the time of loan disbursement or graduated less than 6 months before loan disbursement, and has accepted an offer of (or has already begun) full-time employment.
If Lender agrees (in its sole discretion) to postpone or reduce any monthly payment(s) for a period of time, interest on the loan will continue to accrue for each day principal is owed. Although the borrower might not be required to make payments during such a period, the borrower may continue to make payments during such a period. Making payments, or paying some of the interest, will reduce the total amount that will be required to be paid over the life of the loan. Interest not paid during any period when Lender has agreed to postpone or reduce any monthly payment will be added to the principal balance through capitalization (compounding) at the end of such a period, one month before the borrower is required to resume making regular monthly payments.
KEYBANK NATIONAL ASSOCIATION RESERVES THE RIGHT TO MODIFY OR DISCONTINUE PRODUCTS AND BENEFITS AT ANY TIME WITHOUT NOTICE.
This information is current as of November 8, 2019 and is subject to change.
4 Important Disclosures for Splash Financial.
Splash Financial Disclosures
Terms and Conditions apply. Splash reserves the right to modify or discontinue products and benefits at any time without notice. Rates and terms are also subject to change at any time without notice. Offers are subject to credit approval. To qualify, a borrower must be a U.S. citizen or permanent resident in an eligible state and meet applicable underwriting requirements. Not all borrowers receive the lowest rate. Lowest rates are reserved for the highest qualified borrowers.
5 Important Disclosures for CommonBond.
Offered terms are subject to change. Loans are offered by CommonBond Lending, LLC (NMLS # 1175900). If you are approved for a loan, the interest rate offered will depend on your credit profile, your application, the loan term selected and will be within the ranges of rates shown. All Annual Percentage Rates (APRs) displayed assume borrowers enroll in auto pay and account for the 0.25% reduction in interest rate. All variable rates are based on a 1-month LIBOR assumption of 1.9299999999999997% effective October 10, 2019.
6 Important Disclosures for LendKey.
Refinancing via LendKey.com is only available for applicants with qualified private education loans from an eligible institution. Loans that were used for exam preparation classes, including, but not limited to, loans for LSAT, MCAT, GMAT, and GRE preparation, are not eligible for refinancing with a lender via LendKey.com. If you currently have any of these exam preparation loans, you should not include them in an application to refinance your student loans on this website. Applicants must be either U.S. citizens or Permanent Residents in an eligible state to qualify for a loan. Certain membership requirements (including the opening of a share account and any applicable association fees in connection with membership) may apply in the event that an applicant wishes to accept a loan offer from a credit union lender. Lenders participating on LendKey.com reserve the right to modify or discontinue the products, terms, and benefits offered on this website at any time without notice. LendKey Technologies, Inc. is not affiliated with, nor does it endorse, any educational institution.
Subject to floor rate and may require the automatic payments be made from a checking or savings account with the lender. The rate reduction will be removed and the rate will be increased by 0.25% upon any cancellation or failed collection attempt of the automatic payment and will be suspended during any period of deferment or forbearance. As a result, during the forbearance or suspension period, and/or if the automatic payment is canceled, any increase will take the form of higher payments. The lowest advertised variable APR is only available for loan terms of 5 years and is reserved for applicants with FICO scores of at least 810.
As of 11/07/2019 student loan refinancing rates range from 1.90% to 8.65% Variable APR with AutoPay and 3.49% to 7.75% Fixed APR with AutoPay.
7 Important Disclosures for College Ave.
College Ave Disclosures
College Ave Student Loans products are made available through either Firstrust Bank, member FDIC or M.Y. Safra Bank, FSB, member FDIC. All loans are subject to individual approval and adherence to underwriting guidelines. Program restrictions, other terms, and conditions apply.
1College Ave Refi Education loans are not currently available to residents of Maine.
2All rates shown include autopay discount. The 0.25% auto-pay interest rate reduction applies as long as a valid bank account is designated for required monthly payments. Variable rates may increase after consummation.
3$5,000 is the minimum requirement to refinance. The maximum loan amount is $300,000 for those with medical, dental, pharmacy or veterinary doctorate degrees, and $150,000 for all other undergraduate or graduate degrees.
4This informational repayment example uses typical loan terms for a refi borrower with a Full Principal & Interest Repayment and a 10-year repayment term, has a $40,000 loan and a 5.5% Annual Percentage Rate (“APR”): 120 monthly payments of $434.11 while in the repayment period, for a total amount of payments of $52,092.61. Loans will never have a full principal and interest monthly payment of less than $50. Your actual rates and repayment terms may vary.
Information advertised valid as of 09/23/2019. Variable interest rates may increase after consummation.
|1.81% – 6.49%1||Undergrad & Graduate|
|2.31% – 7.36%2||Undergrad & Graduate|
|1.99% – 6.65%3||Undergrad & Graduate|
|2.43% – 7.60%4||Undergrad & Graduate|
|2.02% – 6.30%5||Undergrad & Graduate|
|1.90% – 8.65%6||Undergrad & Graduate|
|2.74% – 6.24%7||Undergrad & Graduate|