Social media can eat into your bank balance.
Roughly four in 10 adults with a social media account (39%) say that seeing other people’s purchases and vacations on social media makes them look into a similar purchase or vacation, according to a survey of more than 1,000 Americans released this summer by the American Institute of Certified Public Accountants. What’s more, 11% have taken a vacation or made a purchase in the last year after seeing someone’s post about their vacation or purchase.
And fully 30% of Americans say that social media has some influence on their purchasing decisions, with 5% saying that it has a significant impact, a 2014 Gallup poll found. Among millennials the numbers are even higher with roughly half saying that social media influences what they buy.
Some social media-related spending, of course, is driven by the fact that many brands advertise their goods and services on social media or pay celebrities and other influential people to post about them. By 2017, social network advertising spending is expected to hit nearly $36 billion, or roughly 16% of all digital ad spending globally, up from about $24 billion in 2015, according to eMarketer, and celebrities ranging from reality stars like the Kardashians to sports bigwigs to fashion bloggers have endorsed brands on social media.
But often, there’s something deeper going on: “We are socially comparative creatures by nature,” says psychologist and author Nancy Irwin. And the use of social media makes comparisons to others just a scroll or a click away: “Social media can be the modern day version of ‘Keeping up with the Joneses,’” she says, and some people “feel inferior if someone they know has a shinier or bigger toy than they do.”
Many of those people react to this feeling of inferiority by buying the same thing — or even better — than a social media contact has, and then posting about that. This perpetuates the cycle with others seeing the post, and some of them “feeling like they now ‘need’ to one-up you,” says psychologist Elizabeth Lombardo, author of “Better than Perfect: 7 Strategies to Crush Your Inner Critic and Create a Life You Love.”
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Plus, social media “can normalize the buying experience,” adds Lombardo. When multiple people in your social network have $500 designer shoes, it can seem like everyone is buying them — and thus entice you to buy too, even when you can’t afford that.
Of course, “some people can look at others trips and concerts and bling and be truly happy for them and feel no pressure to compete,” says Irwin. And the issues of comparing yourself to others and normalizing extreme spending are by no means limited to what you see on social media.