As we scroll through each app, there may be a moment of envy or wonder for the friends or influencers who give us more than a glimpse of their elaborate lifestyles with scrumptious dining experiences, luxurious destinations, and extravagant wardrobes.
These posts are designed to make you envious. And it may impact your psyche affecting your spending decisions and ultimately your financial well-being. There is even scientific evidence that shows that, when people around you unexpectedly receive a financial bonus (but you don’t), you are actually more likely to spend more money. Spending more to play ‘catch up’ may not exactly work in your favour, even if you are forced to make in-app purchases just to stay in the conversation on that gaming app. Through this blog we try to pinpoint the tricky areas that you can avoid and some positive messages to focus on.
First, it is very important to recognise that the extravagance that you observe on social media may be designed to give you a false sense of affluence. The people spending lavishly may not necessarily be the wealthiest. You may know friends or family who spend a large portion of their wealth just to ‘keep up appearances.’ And this may drain a chunk of wealth on conspicuous consumption. It is a fact that many low-income households get caught in this and end up in a vicious cycle of debt, sometimes ending up in serious financial trouble.
To begin with look at your triggers. Is it a social account that advertises a product, an influencer account that tells you how luxurious a place, bag or experience is? If so, unfriend, unfollow – anything to keep your money safe. More importantly, it keeps your mind from focusing on life. Scrolling endlessly dulls your creativity and dims your interpersonal skills. Be self-aware and try not to compare yourself to others because you may end up spending more. There is some evidence that higher social media use is linked to higher spending, as well as spending on credit. There is also evidence that seeing others’ travel photos on social media makes you more likely to want to visit the same destination. And interestingly, some evidence suggests that some people post their own purchases on social media to obtain social support from others!
Another way to stay focused on your financial goals is to stay away from social media when you have earned your paycheck. Because it does not tempt you to spend. Your less inclined to spend if you are aware of your triggers.
There’s another way to turn social media to your advantage. Populate your feed with positive information, such as accounts or people who can give you real advice. Social media has normalised conversations surrounding money and can be a source of insightful discussions. There are money saving apps, financial help forums, dedicated websites, and other online financial communities to bring together people who want to better their financial situation. Do your research and look up new concepts in financial management that can help you focus on sound financial well-being. You may even find new products that you can research to find more information. Be empowered through the access you have received through social media and use it to build your portfolio with the right products.
Another way to avoid social comparison is to focus on all the good things in your life (or portfolio). Keep a journal where you can jot down the things that you are grateful for – family, friends, and more. This can work positively and keep you balanced and urge you to build your financial well-being. Scientific studies show that expressing gratitude can increase overall well-being and reduce the tendency to engage in social comparisons. That way, you will feel less inclined to buy things to make you feel better. You may even feel more inclined to start writing down your financial goals and imagine what you will be grateful for in the future when you achieve them.
You may see people flouting their financial success by choosing a particular solution or strategy and may be tempted to follow suit. Or see influencers advertising financial schemes that just seem too good to be true. You may come across people speaking about the guaranteed returns or so-called financial experts speaking eloquently about a solution. You may already know this, but you can be influenced by other people in setting your financial goals.
The research on goal setting shows that you are more likely to achieve your goals if you set them in line with your own interests and values. If your goals are more personal when you make your plan of action, they will be more satisfying when you work towards them and less likely to become uninteresting to you over time. This psychological principle is called self-concordance any work you do towards achieving your goal is more likely to succeed if it is aligned with your personal interests and values. So, before you go about setting your financial goals, think about what the goal is driven by: something you heard about a friend of a friend, a social media post, or something more attuned with the things that you think are important and right?
Finally, not all social comparisons are harmful. Just avoid “get rich quick” schemes and look for the communities where people from all walks of life are sharing real stories and “helpful” advice. Joining a supportive community can help you stay on track with your financial goals, reduce financial stress and avoid unnecessary spending. And it may even be a platform where you can share your financial goal progress rather than your latest spending spree.