Social media has made financial planning easier for people from different backgrounds. You may not have had access to people like influencers before, but you can now. These influencers provide guidance on personal finance. It’s essential to note that they don’t all offer certified financial services like financial advisors or planners. It’s also important to keep in mind that there is no one-size-fits-all solution when it comes to finances.
Using social media to stay up-to-date is great, but it’s important to understand how the information their sharing is affecting your finances. To make sure you enjoy social media while keeping your money safe, keep on top of both the positive and negative sides. Read on for more information.
How social media has mixed with personal finances
A recent survey found that social media sites impact spending on banking services and credit cards. Almost half of respondents said they’ve overspent when sharing experiences with friends. It’s not the first time surveys have concluded that social media leads to spending. A recent poll found that two-thirds of millennials ages 23 to 34 say money is a significant source of stress.
Farnoosh Torabi, author and host of the So Money podcast, says social media sites affect personal banking and credit card usage. “We all spend time, so much time, on social media. We tend to overspend because we see all the lifestyles on Instagram and Facebook.”
Most millennials pay more attention to how their friends spend than how they save. It can be easy to do. How many of your friends post how great the financial services they use are or what their savings account balance is this month? Versus how many photos of their latest vacation or an expensive meal? Allowing social pressure to lure us into spending beyond our means can impact long-term financial stability.
Social media and mental health
Social media can be good or bad. It can be a great way to connect with those you care about or an unhealthy escape from reality. Some people, when they feel lonely or start to compare themselves to others, can be tempted to spend too much money. This is also true for others when they feel bored or sad. The bad news is, scrolling through social media can make that worse. The good news is, if you use social media thoughtfully, it can have positive financial and mental health benefits. That’s why it’s important to use social media mindfully rather than as a replacement for in-person interactions.
Social media can be a great way to find resources such as financial services or financial aid. In fact, many financial advisors who use social media say they’ve gained new business assets through their social efforts.
Positive effects of social media
There are many ways social media accounts can help your finances. Here’s how to tap into and maximize these positive effects:
- You can get deals on pre-owned items. Looking for something specific to buy? Consider checking your local Facebook Marketplace before purchasing something new. You may be able to find great deals on used items or even new items that people have decided not to keep.
- You can find discounts. You can save money on things you were already planning to buy by following your favourite brands on social media.
- It can teach you about money. By following the right people, you can gain valuable insights into managing your finances. Many influencers teach you how to find the right financial services and options.
- Extra Income. Social media makes it easy for entrepreneurs to market their products or services online. Many of them even allow sales through their platforms. Offer your side gig services on all your social media accounts. Facebook Marketplace can be a great way to sell your old or unwanted items!
Although social media platforms are free to use, there are various direct and indirect costs associated with using them.
- Targeted marketing. One of the ways that social media can cause credit card debt is through targeted ads. Marketers can customize their ads to reach the specific users most likely to buy their goods or services. These ads can entice users to spend money by using the information they know about you.
- Disconnected buying experience. Buying things online can be less stressful than buying stuff in person because you don’t have to hand over money. When using a card or saving payment information, the sensation of loss may feel minimized. This is especially true when using an app.
- Others’ posts add social pressure. Lots of people post the highlights of their life on social media. Seeing these posts may foster jealousy or insecurity, and you may feel compelled to spend money to feel better about your life. The feeling doesn’t last, so you may end up in a spending cycle.
It’s essential to be aware of why and when you make purchases and ensure they fit within your budget.
Tips for optimizing your personal finance social media experience
Consider reducing social media usage to avoid overspending. Seeing ads can make you want to buy things you didn’t plan to get. You can limit the number of accounts you follow and take regular breaks from the internet. Financial wellness may require changing your mindset and thinking more about your long-term goals.
Find a good balance between social media and real life. There’s no denying that social media is and will remain a part of our culture. So, sure make time for social media, but do so in a way that supports the life you want. Don’t use it just to keep up with others. Instead, use it as a way to connect with your loved ones and a learning tool for things like good financial management.
Found yourself in debt because of trying to keep up with others? You’re not alone and there is a way to get back on track. Contact us today to speak to one of our certified credit counsellors.