More than a third of Americans say their spending habits are influenced by the spending habits of their social media connections. They say “fear of missing out” on experiences shared by friends on social media causes them to spend more than they can afford.
The findings were published by financial services firm Charles Schwab in their annual Modern Wealth Index Survey, a survey of 1,000 Americans and their habits toward saving, spending and investing wealth.
Respondents blamed the social media platforms for their poor money habits ranking the companies as the biggest “bad” influence when it comes to money management.
“The burden to ‘keep up with the Joneses’ has been part of our culture for decades, but it appears that social media and the fear of missing out (FOMO) have increased the pressure to spend,” said Terri Kallsen, executive vice president and head of Schwab Investor Services.
“Spending is not the enemy, but when we allow social pressure or other forces to lure us into spending beyond our means, it can impact long-term financial stability and become a larger problem.”
Other notable findings in the survey include:
• 60% of respondents wonder how friends can afford expensive experiences posted on social media.
• 35% spent more money than they can afford to participate in experiences with friends
• 34% were influenced by social media to spend money on experiences
• 59% of respondents live paycheck to paycheck
• Only 38% percent have built up an emergency fund
A good way to improve financial habits is to write a financial plan. More than 60% of respondents who have written a financial plan feel financially stable, while only a third of those without a plan feel that same level of comfort, according to the survey. Those with a plan also maintain healthier habits when it comes to saving money.
The full results of the survey can be viewed here.