According to a past Bankrate survey, more than one in three American adults feel bad about their finances after seeing other people’s online posts. Social media may enhance communication and news access, but it can also ruin your finances when you’re pressured to spend more than you can afford. It’s not uncommon for social media users to make purchases based on influencer recommendations. Social media impacts your finances in the following ways.
Smooth Shopping Experiences
It’s becoming more convenient for users to shop through social media. According to Avionos, 55% of consumers have bought something on social platforms like Instagram, Pinterest, and Facebook. Rather than relying on website sales, brands are getting closer to the consumer by supporting direct social media purchases. For example, Facebook Shops allows customers to view items, add them to cart, and pay through Facebook Checkout. Users who don’t want to go through item lists can message the brand for product recommendations. Instagram also has features like Instagram Shops and shoppable posts.
Targeted advertising depends on a user’s online activity, interests, gender, age, and location. While targeted ads provide relevant suggestions, they also push you to unplanned purchases. Some ads also make exaggerated claims, resulting in purchases that don’t meet your expectations. Additionally, you risk falling prey to scams–fraudsters can advertise fake opportunities to unsuspecting social media users. Social media advertising also instills the fear of missing out (FOMO) by promoting limited offers and exclusive deals. This way, you might make impulsive purchases or end up in risky ventures.
The longer you stay on social media, the less time you have to set and execute your financial goals. According to GWI, consumers spend approximately 2.5 hours daily on social platforms. Instead of using your time to budget, learn new skills, or build a side hustle, social media distracts you in the form of:
- Infinite scrolling
- Diverting your focus from the main task
- Inability to focus after interruptions
If your friends flaunt cars, houses, vacations, and designer clothes on social media, chances are you might desire that life too. You could even succumb to debt or eat up all your savings chasing a similar lifestyle. Truth is, what you see on social media isn’t always as it seems.
Before you enter a financial mess trying to compete with your friends, consider this:
- Your friend might have a wealthy family to pay their bills
- Your friends might be struggling to meet their car and mortgage payments
- Whatever they’re showing off doesn’t belong to them, they could have borrowed designer clothes to take pictures
Resist the Temptation: Use the Internet to Your Advantage
Social media isn’t entirely negative. Here’s how to use it to grow your money:
Reach Your Financial Provider
With most financial institutions on social media, you can get swift responses to your queries without going to a physical branch. For example, you can send a direct message to your bank, insurance provider, and brokerage firm, or call them out in public.
You can also follow social media conversations to gauge the credibility of a financial institution.
Build Your Business
With social media users cutting across different demographics, you can go online to promote your products and services. Social media also humanizes your brand. Rather than portraying yourself as an institution, your brand is more relatable when you introduce your staff and company values. Additionally, you can create professional profiles on different platforms to sell your services as a freelancer.
Personal Finance Lessons
You can learn about money by following your favorite financial platforms. Instead of setting up in-person meetings, you can learn from industry experts in the comfort of your home. Social media also offers networking opportunities. No matter your financial goal, you can always find someone online on a similar journey.
Social media can make or break your finances–it all depends on how you use it. If you want to rebuild your finances without social media pressure, feel free to limit your time online and re-evaluate who you follow.
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