In the age of social media, it is easy to compare our lives to those of others. This often results in the fear of missing out (FOMO), the fear that your peers are doing something or have something that is better than what you have or are doing.
In a recent study called “Meet Gen Z: The Social Generation” conducted by Hill Holiday, a marketing and communications agency in Boston, Massachusetts, revealed that 55% of participants have an ad on their feed drive their purchases. From that same study, 57% of participants purchased a product they saw because of a social media influencer or celebrity. These unexpected purchases add up quickly and put people into serious financial troubles as well.
A 2018 study called “Nearly 40% of Millennials Overspend to Keep Up With Their Friends” conducted by Credit Karama found that 36% of those in the study consistently spend money they do not have because they were afraid they would not be included in future events with their friends. This is putting young adults in a financial position that can be detrimental to their finances. These purchases can also cause negative strain on emotional, social and intellectual health. There were reports of peer pressure, need for inclusion, low self-esteem and online addiction noted in the Credit Karama study.
One of the main contributors may even be fintech, a technology created to provide new and better financial services, which can make spending money, especially money people do not have, even easier. Some examples of fintech that are commonly used are Venmo, PayPal, Apple Pay, Samsung Pay and so many more.
The best way to prevent unexpected spending due to FOMO is to learn about the multiple ways FOMO could be spending your money and even use fintech budgeting tools such as Mint or Prism to help track spending and bills. The best way to prevent overdraft fees or overspending is to set aside a certain amount of money each month dedicated to impulsive purchases or spending time with friends.
To learn more about budgeting, reach out to the SNHU financial literacy team. Set up a meeting by emailing firstname.lastname@example.org.