And 5 ways you can overcome the overspending that results.
Social media has taken up residence in our everyday. We use Snap and Facebook to catch up with friends, Twitter to get the latest presidential update, Linkedin for career networking, and Instagram to get your fill of the fine arts.
The average American spends 2 hours and 22 minutes on social media daily. It is no wonder marketing master minds have discovered this is the next best thing to getting you to spend your money on their clients’ products, and we are saying yes, yes, yes–even if it means putting that purchase on a credit card…for the points, right?
There is a frightening belief among millions of Americans that your material possessions define your personal identity. I don’t believe this is necessarily an ideal, but it is definitely a societal truth. We now live in an era of consumerism. Heck, Keeping Up With the Kardashians has been on the air for 11 years now. The Real Housewives of wherever is just as popular.
We enjoy the idea of leading a life of luxury and opulence. A desire for lavish cars, swanky clothes, and to own the largest and most host worthy home on the street have edged passed good old fashioned values.
I think there are a number of things going on here, psychologically.
Keeping up with the Joneses
It is human nature to judge our own fortune relative to our peers. As a matter of fact, a portion of our brain that encodes the feeling of pleasure is activated when we feel like we have done better than our peers. We live in a consumerism era. Translated: We want to be richer and have more beautiful things and experiences than our peers.
Let’s be honest, I bet you have felt it at one point or another, maybe more, in your life. It is tough to avoid in a 24/7 media run world. You see it everyday on social media. Your friend from high school just bought a new G-Wagon. Your coworker just showed you the plans to their new 5 bedroom house with a pool and yoga studio. Your best friend just booked a trip for a two week stay in Switzerland. We all want nice things, and that is okay.
It is okay until we decide we want to live the same lifestyle but can’t afford to.
You begin to feel compelled to compare your lifestyle to the one you see on Instagram, other social media platform, movies, or from celebrities. For some reason, we believe that is the life we need to lead, the things we need to own, in order to be successful among our peers–to be the best. We think, somehow, if we emulate the life they lead, then we, ourselves, will be successful.
That is when it becomes dangerous. That is when we overspend.
Reminder-not everything you see on social media is fact. You only see the good. No one is going to post their experience of binging on The Office eating Cheetos. You aren’t going to see folks post the credit card debt they incurred from going on that two week safari.
FOMO
Fear of missing out is, indeed, a psychological phenomena–a natural human reaction to avoid any loss. By witnessing your peers, or strangers, experience something you want, but do not have, registers as a loss in the brain. Pictures of European vacations, destination weddings, shopping sprees in Paris, snorkeling in the Caribbean, cruising the Mediterranean, African safaris. We are reminded everyday we are missing out on these experiences. But, we aren’t. We are living our own life, at our own pace.
Compared to the baby boomer generation, millennials are saving less and spending more money, they don’t have, on vacations.
They Bring in the Dough, You Rack Up the Debt
Social Media is a marketing tool that business owners have come to love as these social media platforms have become one of of the most lucrative money makers. As of 2019, 79% of Americans use social media. It makes good business sense to invest and use these platforms to bring in customers, and bring in the dough. And they sure do put some dough into this research. Marketing gurus are smart. They understand the psychology. They understand the emotional reaction products have on consumers.
Influencer Marketing
Americans love celebrities. Period. It is good business. Influencer marketing, oftentimes, utilizes celebrities to give testimonials on their product use. And we know for damn sure this brand isn’t this particular celebrity’s go to product 24/7, because we follow them, but we believe the testimonial anyways. What’s with that? Damn, their good.
Get out of my head!
Targeted Advertisements
The macro definition of this form of marketing is an online marketing tool that targets certain traits, demographics, or even psychographics of consumers. On a micro level, these tools look at browser history, spending habits, internet searches. It is the job of this tool to understand your personality, your lifestyle, your opinions, and interests. These tools know you better than you know yourself. And, it is becoming even more sophisticated.
Damn A.I.
Watch out eharmony.
The Endgame
Cha-ching. Consumers start swiping cards and racking up debt so they can have the next best thing or experience. Businesses make lots of money, banks make money on the debt, the world keeps going round. We all know it is more sophisticated than that, but, the point is, the times aren’t changing any time soon. We must adapt.
5 Ways to Avoid Overspending
Understand your spending triggers
Overspending has a huge emotional component to it. Understanding your triggers will help you avoid overspending. Keep a notebook and write down your feelings when you have the urge to spend on non essentials. What is it that is driving the emotional reaction? Tackle that problem first, and it may help you better understand your overspending.
Remove Temptation
Unfollow influencers that try to sell you something everyday. Simple. Get rid of the temptation. If that temptation comes in a different form, like Amazon, then block the site on your internet settings for a month or two. Walk passed your favorite store everyday on the way to work? Take a different way.
Track Your Spending
These days our fintech has the ability to do this for us–sometimes even in pie chart form! Look for your problem areas. Do you spend too much money on going out to dinner? Do you spend too much money on entertainment?
Now, take it a little further. Write down everything you buy. Keep a register! When you take the time to write something down you will have that time to process the implications of such a purchase instead of it being hidden on the credit card bill.
Cut Up Your Credit Cards (except 1-lock it up)
Cut up your credit cards and be done with it. No credit card=no credit card debt. Now, you are forced to live within your means-AKA not spending more than what’s in your checking account because $35 fees hurt! I do advise keeping one credit card open for emergencies and maintaining a good credit score. Make this your gas card, but only a gas card!
Budget Your Money
The key to creating a healthy and effective budget is to keep it simple. Over complicated plans will only discourage you. You can find budget templates online, or you can make your own. I suggest a monthly budget. Make a list of income, bills, good, entertainment, and savings. When you get to a point you see your savings increase, you will want to keep going!
Consumerism is a cultural problem. Our society has become addicted to acquisition. The social pressure to overspend has led to a generation of Americans unable to save money. Has the introduction of social media led to this problem? I think there are many factors contributing to the cultural issue, but social media use is a key player in the growth of consumerism and increase in consumer penchant for overspending.
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