Even when you're fully aware of how social media and peer pressure can affect your spending habits, it's still hard to resist the temptation to "keep up with the Joneses."  According to Schwab's 2019 Modern Wealth Survey, some 33 percent of Americans say social media posts have manipulated their spending habits. Understanding how social media influences debt can help you avoid this trap. Here’s what you need to know.

How Social Media Influences Debt

The Fear of Missing Out

Sometimes referred to as “FOMO,” this psychological phenomenon has long been manipulated by marketers. When people see others getting something they are lacking, their impulse is to find a way to acquire it too. 

Additionally, if consumers get the idea a deal will only be available for a limited time, or supply of a product is restricted, they will make a buying decision in haste. This can have negative consequences for your financial situation if you choose to use credit to make a purchase. If this has already happened to you and things have spiraled out of control, consulting a debt relief company can help you get things back on track, as these Freedom Debt Relief reviews will attest. 

The Need to Fit In

Another interesting quirk of human nature is the desire to be part of the “perceived in crowd.” The way people dress, the cars they choose to drive, the neighborhoods they occupy and even the foods they eat are often predicated by a longing to be seen as someone who is in tune with the latest trends.

Social media provides the ideal platform to demonstrate this awareness, as one’s tastes can be readily displayed. What’s more, social media lets these people go a step farther in this regard than they could in the past. Now, in addition to what they have, people can show off what they do as an indication of their status in life.

Nowadays people use social networking sites like Instagram to showcase their work as content and apply all the techniques to get more exposure. To ensure their business profit they often choose to buy Instagram views and likes.

Targeted Advertisements

Ever wondered why ads for your favorite clothing line, watch brand or car always seem to pop up in your social media feed?

Social media networks observe your likes and dislikes and read the cookies on your access devices to determine what you’ve been doing online. If you’ve been responding to posts about travel or spent some time on the ‘net researching a vacation destination, you’ll start to see advertisements about it.

This engenders a sense of familiarity with these products and services, which makes you more susceptible to making a purchase. Research has found this also translates into the real world. A Deloitte study found consumers who use social media while shopping tend to spend more on purchases.

Resistance Isn’t Futile

You’ve just taken the first step toward guarding yourself against these circumstances. Awareness of the possibilities is huge when it comes to resisting these impulses.

The following (no pun intended) actions will help you take it even farther.

• Lay back for a while: It’s all too easy to get caught up and let social media consume all of your “free” time. Find something to do other than scroll your feed. Read a book; engage with family and friends “IRL.” Reducing your screen time pays huge dividends in this regard.
• Consider the underlying realities: Keep in mind people are only showing you the best aspects of their lives. Behind that dream vacation to Tahiti is likely to be years of debt payments.
• Buy only when you can pay cash: If you’re about to splurge on a treat for yourself, particularly if you got the idea from a social media post, ask yourself if it’s really worth going into debt to have it. Sure, that instant gratification is going to feel good, but it will be followed by extended payments, which hold the potential to diminish the joy considerably.

Understanding how social media influences debt is key to avoid compromising your financial future just to look good for people you barely know. These tips will help you avoid that morass and keep more of your money where it belongs — in a savings or investment account.