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How social media envy inspires overspending

How social media envy inspires overspending

November 04, 2021

You had every intention of paying off your credit card this month, perhaps even contributing to your 401(k), but those plans got put on hold (yet again) after you splurged on a flight to Greece — a bucket list trip inspired by your former colleague’s fabulous selfies on social media.

You’re not alone. A growing body of research suggests that social networking sites have put the great American tradition of “keeping up with the Joneses” on steroids.

“With access to social media, we now see when our friends purchase a new car, or make some other significant purchase,” said Judy Blackston, a financial professional with Coastal Wealth in Savannah, Georgia. “Now we are jealous. We immediately begin to adjust our budget and justify going into debt for a new car that is slightly more expensive than our friend’s to win the contest!”

A 2021 survey found more than half of Americans (51 percent) said they experienced FOMO, or “fear of missing out,” last summer, and 39 percent said they feel influenced to spend more when they see others doing so on social networking websites.

FOMO was particularly strong, it found, among younger generations. Of those financially affected by the rise in gatherings as COVID-19 vaccinations ramped up, millennials and Generation Z reported spending, on average, $1,016 more per month than they did last summer. Nearly all Gen Zers (90 percent) reported that they were influenced by social media to go out and spend more, and the vast majority (85 percent) said they experienced FOMO during the summer. The top experience Americans spent money on during the summer of 2021 that they did not during the prior summer is dining out (36 percent), closely followed by travel or vacation (35 percent).1

“People want to escape and fantasize about what life would be like if they could change their circumstances, whether monetarily or from their day-to-day routine,” said Cynthia Richards-Donald, managing partner of Premier Wealth Transfer Group in Charlotte, North Carolina, noting social media posts should never be taken at face value. Social media provides this outlet.”

MassMutual’s findings mirror the results of other national surveys, including one by budget tracker Mint in 2020, which found that 40 percent of Americans admitted to purchasing an item or experience after viewing something similar on social media. Interestingly, the survey found that nearly 20 percent of social media users also judge those who share purchases online and 64 percent wonder how their friends are able to afford what they share.2

Indeed, researchers have found a clear link between the use of social networking sites and conspicuous consumption, which is defined as expenditures on luxury items to enhance one’s prestige or display wealth.3 Lifestyle envy impels some to splurge on cars, clothes, and big-ticket items, such as kitchen remodels, in an effort to close the perceived wealth gap between themselves and their friends.

But it’s not just our peers on social media who fuel the desire to consume. It’s also:

  • Influencers we follow who paint a false reality.
  • Targeted ads that exploit our shopping history.
  • One-click purchasing.
  • Credit card offers that flood our virtual shopping carts.
  • Free shipping offers that mitigate the financial risk of “trying it on.”

Tips to break the cycle

If you find yourself trapped in an unhealthy pattern of digital one-upmanship or impulse buying based on a proliferation of pop-up ads, it’s time to break the cycle.

Start by setting new rules for yourself around checking status updates on your favorite social platforms. In today’s wired world, it may not be possible (or prudent) to sever the connection entirely, but you can train yourself to check your feed less often, say, once a day, or better yet – once a week.

You may also wish to simply block the people (less harsh than unfriending them) and influencers who stir feelings of envy or insecurity.

Next, set a budget based on your monthly income and expenses, said Blackston. It’s all too easy to click “buy” when shopping online if we don’t live with limits. MassMutual’s monthly budget calculator can help you determine how much you should sock away each month for long-term saving goals, such as retirement, a down payment on a home, and college savings for your children. 

“When you begin to see numerous packages delivered to your door, be sure that you have tracked that spending,” Blackston said. “Devise a plan to pay your bills and then set aside an allotted amount of money that may be used to purchase items of necessity. There are also apps that could be used to refund you portions of what you have spent online or in stores.”

Examples of such personal finance and budgeting apps include Mint, You Need A Budget, PocketGuard, Personal Capital, and Honeydue.

Consumers can also regain control over their spending by tracking their purchases and expenses daily, which helps identify areas of waste. Some financial professionals also recommend paying cash for daily expenses such as groceries, gas, and lunches out, which for many is psychologically harder to part with than paying by credit card. 

Social media users can also be proactive about resisting temptation. Most platforms, including Facebook (which owns Instagram) and Twitter, enable you to customize your preferences to minimize targeted ads through your settings. Some also enable you to choose to see fewer ads on certain topics. And, you can potentially block ads from specific brands. 

Finally, Blackston urges social media users who overspend due to envy or comparing themselves negatively to their friend’s (often false) online narrative to insulate themselves by bringing more meaning to their lives.

“One suggestion for social media peer pressure is just to be content within ourselves,” said Blackston. That can be accomplished by giving back to our community, starting meditation or yoga, staying focused on our friends and family (offline), and setting attainable goals.

Richards-Donald agrees, reminding social media users that everything they see online is a highlight reel. Take it with a grain of salt.

“Social media is where people can curate their virtual life,“ said Richards-Donald. “It’s a digital soap opera. They post about their luxury vacations, jewelry, cars, and homes when in truth it could just be a property that they rented for the week or weekend.”

Provided by Shelly Gigante, courtesy of Massachusetts Mutual Life Insurance Company (MassMutual). 

©2021 Massachusetts Mutual Life Insurance Company, Springfield, MA 01111-0001