Is Social Media Ruining Your Finances?

It’s pretty well accepted that social media can have negative consequences for our mental health. As we look through snapshots of the perfect lives our friends and family seem to be living, it’s hard not to view our own lives in a less impressive light. 

But spending too much time on social media – and spending it the wrong way – can have a negative impact on our finances as well. With all the influence social media has on our thoughts and behaviors, it’s no surprise that it can affect our spending habits as well. 

It’s time to ask: Is social media ruining your finances? 

How Social Media Affects Spending 

In a 2019 poll from Charles Schwab, 49% of millennials and 43% of Gen Z said social media made them spend money on experiences. 

What’s even more telling is that 48% of millennials and 41% of Gen Z said they spent more than they could afford because of social media. Social media had the worst impact on spending among respondents, while other influencing factors like family, friends, neighbors, and co-workers ranked far lower.   

A separate survey from Allianz Insurance found that 57% of millennials made an unplanned purchase because of something they saw on social media. Almost 90% of millennials said they think social media makes it easier to compare their lifestyles with others. 

Lessening Social Media’s Impact  

It’s almost impossible to completely disconnect from social media these days, but you can take steps to minimize its impact on your finances. 

Set a Budget 

If social media is making you overspend, creating a budget should be the first solution you try. A budget is like a road map for your money – it won’t drive the car for you, but at least you’ll know when you’re making a wrong turn.  

A good budget should have space for things you want to buy and the experiences you want to have in the near future, but it should also consider future goals. This can include starting a business, going back to grad school or buying a house. 

Find a way to balance weekend brunches, new clothes, and concerts with your savings and debt payoff goals.  

Unfollow Brands  

A few months ago, I decided to try something different with my Instagram account. I started following indie brands and stores, where before I had only followed my friends and favorite blogs.  

Something changed. I started seeing more and more products in my feed, and I would almost always stop and look at their photos. Every once in awhile, I’d buy something. I eventually realized a fairly obvious truth – seeing products more often makes me want to buy them.  

If you have a similar problem, try unfollowing brands as soon as they appear in your feed. Instead of following companies, start a Google Doc and write down their names for the next time you want a new pair of earrings.  

Be careful which bloggers and influencers you’re following as well. Most of them make money by shilling products and earning referral bonuses when a follower buys something from one of their links.  

Set Time Limits on Apps 

If you have an iPhone with iOS12 or higher, set a time limit for certain social media apps like Instagram or Facebook. Go to “Settings” and choose the “Screen Time” option. Then, scroll down and pick which apps to limit. 

There’s no setting like this for Android phones, but you can bootstrap something similar. Download the Forest: Stay Focused app to create a hands-off period for your phone. Once the time begins, a small tree will start growing on the screen. You’ll see that small tree every time you pick up the phone. If you decide to break the promise and use your phone, the sapling that was growing will shrivel and die. 

Log Out of Apps 

Have you ever found yourself browsing Facebook, only to realize 15 minutes later that you originally picked up the phone to call your mom or respond to a text? Social media can be a mindless activity, and it’s easy to spend half an hour on Instagram without realizing it.  

One way to break this habit is by logging out of social media apps after you use them. You’ll have to type in your password the next time you want to log in, which is a surprisingly effective deterrent. Adding just one more barrier to the process can stop you from logging on as frequently, giving you the opportunity to pause and decide if social media is really how you want to spend your time. 

Curate Your Social Media Feed 

Following fashion bloggers isn’t the only way social media impacts your wallet. According to a 2018 survey from insurance firm Allianz, more than 60% of millennials said social media makes them feel inadequate. 

Take a few minutes while browsing Snapchat or Instagram and notice how you feel. Are you sad that everyone else is going on vacation while you’re stuck at home? Are you jealous that your old roommate just bought a house? Do you get angry every time a post from your ex-boyfriend shows up? 

When these feelings crop up, they can ripple out in ways that impact your finances. You might have the urge to go shopping for some retail therapy or treat yourself to a fancy dinner. You might even take on debt to finance a new car or other large purchase.  

Consider muting or unfollowing accounts that make you feel worse, even if it’s someone you like in real life. Instead, follow people and blogs that represent hobbies and interests. I love sewing, so I’ve started following more fabric brands and sewing bloggers. I feel inspired when I see these posts. 

I got this idea from my friend Rachel, who mostly follows accounts from artists and bookbinders, her primary hobbies. I noticed that when she talks about Instagram, she doesn’t have the same negative relationship that so many of us do. Since following her advice, my own relationship with Instagram has become much more stable.