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Is social media causing us to get into debt?

social media influencer debt

Extortionate rental prices, credit card bills and student loans make it difficult for millennials and Gen Y to save for their future retirement. However, a new threat is impacting our financial growth and security - social media.

Do you ever get envious of your friend’s social media feeds – jetting off to somewhere exotic, wearing new outfits each day, dining at the hottest restaurants and hotels, flexing their muscular/slimmer bodies, and amazingly, living what appears to be a better life than your own? 

You’re thinking how, right? 

Perhaps they were born with a silver spoon, earn a huge salary, or maybe they’re bargain hunters… Or maybe, they’re going deeper into debt.

Our social media feeds are packed with images flaunting parties, nightlife, sporting and music events, travel, clothes, electronics, cars and jewellery, causing young adults to replicate and spend more than they earn, leading to higher rates of debt and paying for items they cannot afford.

This increased expenditure is hampering young people’s efforts to save for their financial future and obtain little security in their lives, like careers, houses, or retirement.

The situation is becoming more critical each day. According to a recent Credit Karma survey, nearly 40% of millennials spent money they didn’t have and got further into debt to keep up with their friends. 

Is this a fair judgement on millennials and Gen Y? Or is the criticism by older generations warranted?

Millennials and young people are savvy savers though

This debt caused by keeping up with friends may conform to media-held stereotypes, young people are smart about saving for what they want, with 71% of them using financial hacks, online tools and apps to reach their financial goals. 

Tellingly, millennials use different accounts to automatically save money for specific purposes, including everyday expenses, a special trip or particular loan repayments.

These are all sound financial habits.

So why do we feel pressured about getting into debt?

The reason is simple:

Trying to replicate your friend’s lifestyle can be costly, and spending more to match their experiences is led by “FOMO spending” – Fear Of Missing Out. FOMO is a new term for “keeping up with the Jones’.”

Millennials and young people find it uncomfortable saying “no” to their friends when they suggest doing an activity they cannot afford.

Of course, FOMO is an experience we’ve all confronted – being asked to attend an event, even when you can’t afford it, and yet, we attend and spend our limited supply of money anyway. These short-term spending habits derail young people’s long-term planning, with them not saving enough for retirement or purchasing a home.

The negative influence of social media

FOMO is nowhere more prevalent than what millennials see on their social media feeds, with 57% stating this was the most significant influence in causing them to overspend each month. 

Furthermore, 88% of millennials believe that social media creates an environment where they compare their lives with their friends and acquaintances’ wealth and lifestyles. 

People spending up to nine hours a day on social media are inevitably bombarded with images displaying how wonderful their friends’ lives are compared with their own. By social media platforms, users spend their time browsing these sites during the day:

  • YouTube – 40 minutes
  • Facebook – 35 minutes
  • Snapchat – 25 minutes
  • Instagram – 15 minutes
  • Twitter – 1 minute

Social media is dominating people’s lives, whether they like it or not and it is becoming impossible to escape the content and images that surface on these platforms.

Don’t only blame social media

The quest for that picture-perfect lifestyle isn’t just pushing social media users into debt – it’s also causing cultural issues within society. 

Instagram, according to a study completed by the Royal Society for Public Health, was the worst social media app for users with mental health. 1,500 Britons were surveyed and identified that Britons aged 14 to 24 were most likely to associate Instagram with negative psychological well-being combined with feelings of inadequacy and anxiety.

Furthermore, the study found these platforms were the worst for young people’s mental health:

  • Instagram (the worst)
  • Snapchat
  • Facebook
  • X
  • YouTube

“Social media has been described as more addictive than cigarettes and alcohol and is now so entrenched in the lives of young people that it is no longer possible to ignore it when talking about young people’s mental health issues,”Shirley Cramer, CEO of RSPH. 

It could be argued then that social media is an easy target for causing low self-esteem issues and image-obsessed bodies. However, this obsession existed before social media existed. 

According to an American Psychological Association study, millennials cared much more about their image and money than previous generations:

45% – Baby boomers

70% – Generation X

75% – Millennials

Millennials are more likely to be impacted by images of others they perceive to have a better image and lifestyle. Furthermore, they are likelier to find these images on social media, namely Instagram and Snapchat.

When social media and self-obsessed images combine

Instagram has seen a boom in so-called social media influencers who make their lives look perfect and spend thousands of dollars doing so.

26-year-old Calveiro wanted to become an Instagram star. Calveiro bought expensive clothes and designer handbags, ate lunch at five-star hotels and took exotic holidays and spent $10,000 to achieve this. 

There was a caveat, though, Calveiro only worked low-paid jobs. 

“I was shopping … for clothes to take ‘the perfect ‘gram,’ I was living above my means. I was living a lie, and debt was looming over my head.”Lissette Calveiro, wannabe social media influencer

If Calveiro had ‘made’ it, she could have been like several other successful influencers who charge £1,000+ for one post from advertisers and sponsors. But to charge these kinds of fees, you must have a lot of surplus cash!

A study by Fashionista.com found that, on average, you need to spend more than £30,000 “just to maintain the standards of physical beauty represented daily in our Instagram feeds”.

If, like Calveiro, you don’t have the budget to live this kind of lifestyle, you will soon find out it can be financially crippling, resulting in thousands of pounds in debt.

Calveiro spent 14 months attempting to clear her debt of £10,000 using budget savings apps, admitting that she should have saved that money for her future rather than spending, spending, spending. 

How to avoid getting into debt over social media

You can do a few things to avoid the temptation of trying to live up to your friends’ standards. Here are 5 tips to help you get started.

1. Dial back your use of social media.

Social media is just as addictive as cigarettes and alcohol, so this is easier said than done; plus, many of us use social media for our work, so going cold turkey is merely not an option. Ask yourself, can you limit the number of platforms you use and stick with those that focus less on images and more or meaningful friendships?

2. Think through your purchases.

Just because your friends buy lavish holidays and jewellery, does this mean you must follow suit? Probably not. Question whether a coffee and croissant could replace that expensive brunch at a 5-star hotel for the perfect Instagram photo at a local coffee shop. After all, coffee comes with many designs in the foam you can snap and publish online!

3. Leave your plastic at home.

Most millennials suffering from FOMO often make purchases with their credit cards when impulse shopping. Just do not take it with you, and you’ll be unable to buy that designer handbag.

4. Suggest free alternatives

This does not mean you’re the boring one in your social group; merely try to be innovative in your ideas for meeting up. Instead of going to the cinema, why not watch a film on Netflix? If you must go out, you could cut down on how many courses you have in a restaurant or order in full stop. 

5. Be honest with your friends

The good thing about friends is that they tend to want the best for you, like financial security. However, a significant amount of people aren’t open about their finances. Of the 40% of people who went into debt for their social lives, 73% kept it a secret from their friends.

Don’t be secretive; tell them if you cannot afford to match their lifestyles. Real friends will understand and not mind cheaper alternatives to hanging out together. 

Social media and debt

Social media is not solely responsible for us getting into debt. 

The pressure to keep up with neighbours and friends, often perceived as a ‘better lifestyle’ has not changed since the 1960s and the generations that have come since then.

Social media has merely amplified the varying lifestyles that households and young people witness, and sadly for millennials, this pressure to conform is greatest in their generation. 

Millennials and Gen Y are also the heaviest social media users and witness this in their newsfeeds; inevitably, it is them who have become the most susceptible to debt, whether caused by social media or not.

Remember – don’t follow your friends and sink into debt merely to keep up with them. Doing so will only ruin your monthly finances. Wise up and be sensible, because your friends are probably not.

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