“We’re hyper aware of what other people are doing,” said Kelly Lannan, director of women and young investors at Fidelity Investments. “But now it’s not just keeping up with friends, it’s keeping up with celebrities.”
More than half, or 57 percent, of millennials have spent money they weren’t originally planning to on products they saw in their social media feeds, according to research from Allianz Life Insurance Company of North America.
Trouble is, there often isn’t the cash to back it up. Nearly 40 percent of young adults said they spent money they didn’t have, sending them into debt to keep up with their peers, according to a separate report by Credit Karma.
“More than any other generation, social media and the allure to spend beyond their means could have long-term negative effects on their finances if they’re not careful,” Paul Kelash, Allianz Life’s vice president of consumer insights, said in a statement.
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Overall, 63 percent of millennials think social media has a negative influence on their financial well-being, according to a millennial money study by Fidelity, which polled more than 2,000 adults ages 22 to 27. And yet an even greater majority — 66 percent — said saving for the future is as gratifying as treating themselves today.
To get there, Fidelity’s Lannan advises consumers to stay focused on longer-term goals, practice mindful spending and set boundaries. Going out to brunch on the weekend is fine, but limit it to either Saturday or Sunday, rather than both days, she said.
Finally, to keep FOMO in check, talk to friends, a spouse or a parent “in real life,” Lannan said. “They are probably living closer to the way you are living and understand the feeling.”
Christopher Tracy, president of budgeting app Mvelopes, also recommends taking your credit card information offline to help slow down impulse spending, limiting your daily time on social media and unfollowing people or stores that tend to trigger purchases.