How social media and FOMO wire you to spend money

2018-10-23T00:32:02+00:00Shopping|

I’m spending too much time on social media. I scroll past the seemingly perfect lives of friends traveling to cool countries on Facebook, I “heart” the filter-lovin’ fashion influencers on Instagram, and I pin pricey home renovations on Pinterest. I once viewed a 15-minute makeup tutorial on YouTube, but got lost when the beauty guru baked, strobed, bronzed, and contoured her face with $350 worth of makeup. Since I don’t know what any of that stuff is, I decided I don’t need it on my face. But yet, I kinda wanted it anyways.

FOMO Fear of Missing Out

I know why I’m addicted to scrolling through other people’s lives – it’s because no one really lives this way in reality. Sure, I’m enticed by the flashy stuff and exotic travels of the online Filter-ati, but when I see filters imposed over social images, I can’t help but peek under the surface and add up the cost. Are we buying what our friends and brand influencers are selling? Yeppers.

#brokeAF

Social media lures you to spend, and the cost is real. After studying nearly 700 million shopping sessions across leading retail sites, the e-commerce consultancy group RichRelevance found that Pinterest users spend $170 USD on average per order – that’s about double what Facebook and Twitter users spend. Hashtag #brokeAF.

If you’re checking your social feeds anywhere near the global average of 135 minutes per day, chances are you’re dropping some serious coin. The leading culprit is an emotional state called the Fear of Missing Out (FOMO). Here’s how FOMO wires you to spend and how to beat the online urge to splurge.

Fear of Missing Out #FOMO

The fear of missing out, or FOMO, is the new way of Keeping up with the Joneses. But unlike the Joneses next door, today’s FOMO feeds you a 24/7 global stream from a curated group of friends, celebrities, and influencers who eat brunches, buy gadgets, and wear luxury clothing – so it’s not like glancing into your neighbour’s yard and just seeing a well-kept lawn. The endless stream feels real and it feels awful.

Social media gives you a front row seat to everyone’s highlight reel. This intimate view can bring twinges of jealousy and even lead to feeling emotionally gutted when your modest lifestyle appears inferior to the aspirational online collective.

Perhaps the hardest way social media influences spending is through peer pressure. In a recent survey, Allianz Life found 55 per cent of millennials have experienced FOMO, and 57 per cent say they spent money they hadn’t planned to because of what they saw on social media.

Behavioral scientists and psychologists often deem when we compare our lives to others as “relativity bias” and/or “social comparison theory”, where we determine our personal worth based on how we stack up against others. So basically, if you want to feel underpaid, under-accomplished, unattractive, and unawesome at everything in life — despite the reality that you’re awesome at a lot of things — then scrolling through social media is the perfect tool for feeling like $hit.

As an aside, I would highly recommend Dan Ariely’s book, Predictably Irrational: The Hidden Forces That Shape Our Decisions where he explains (in a fun way) relativity bias and how to better deal with having an irrational human brain. Yes, we all have an irrational human brain.

All generations FOMOed

While millennials are hardest hit, the FOMO phenomenon spans all generations, genders, relationship statuses, and income levels. I’m Generation X, BTW, and I feel the dreaded FOMO too, so you’re FAR from alone. I talk about my FOMO on the television show Finance is Personal, and there’s video proof of me getting real with my FOMO!

In a FOMO-specific survey of 900 Canadians by RateHub, a mortgage comparison site, 25 per cent said FOMO is their main motivation to shop and 70 per cent believe that close to one quarter of their debt is from FOMO overspending. So if you carry a $4,500 credit card balance, then $1,125 would be attributed to FOMO purchases.

FOMO social media

Feeling FOMO is one thing. Giving in to it is another. It’s no secret that friends who humblebrag their career accomplishments, exotic travels, luxury purchases, and perfect family lives are looking for social elevation in the form of likes, hearts, and retweets. Sure, give them a thumbs up, but stay strong. It’s not all real. Especially those perfect family lives.

Fighting FOMO

A site with an infinite scroll is bad for your soul, so limiting the time you spend on social media is a key to taming your emotional spending. Look at who you follow and ask yourself: “Does this person give me financial anxiety?” “Am I comparing my self worth to others?” If so, then unfollow or mute that feed.

Removing social apps like Facebook, Twitter, Instagram, and Pinterest from your phone is a solid way to kill the source of emotional bankruptcy, relativity bias, and social comparisons elevated through social media. Changing your online circles and social feeds can boost your relative happiness (and hopefully decrease FOMO) since your source of comparison is gone. Poof — you’re awesome again!

Speaking from relative experience, I’ve removed all social apps from all of my digital devices and I feel so much better. I really do.

Lastly, before making a reactive purchase online, give yourself a full 24 hours to get over the FOMO feeling – you’ll often feel less compelled to make an emotional purchase a day later. Need a reality check or a laugh? Go ahead and add up the cost of all the stuff on a coveted feed — you can use my track spending tools — chances are that friend or influencer can’t afford all that fancy stuff either.

Remember: Infinite scroll is bad for your soul (and bank account)!

Love love love,
Kerry

2 Comments

  1. rob philip October 23, 2018 at 1:20 pm

    I don’t actually understand the FOMO shopping. I occasionally factor in what I’ve seen on the web into my decisions about where to travel, but day to day not at all.

    Also, you mentioned a $4500 credit card balance. Hopefully you meant a “balance until the bill is due”. Anyone paying interest on that balance has bigger problems than FOMO.

  2. Danielle Ogilve October 28, 2018 at 1:32 pm

    I cannot agree more! Great tips! I’ve been practicing the taking a step back and thinking if I really need/want it approach too

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