Social Media Will Try to Bankrupt You – Here Are Four Tactics to Stay Solvent

Finally, a kind word for millennials: According to a study from Allianz Life, this much-maligned group is in fact setting itself up “to be in better financial shape than other generations.”

The study of 3,000 Americans revealed that millennials have good savings habits and that 77% feel “financially confident.” That’s the good news.

The bad news: Social media is messing with their heads.

Allianz recently released some additional data from the November 2017 study. Nearly 9 in 10 (88%) of millennials say they think social media encourages people to compare their lifestyles and wealth with other people’s – and 57% admitted they’ve spent money they hadn’t planned to use because of things they saw on social media.

Problem. In a perfect world, we’d just feel happy for our friends and respond with emoticons rather than shopping.

Spoiler alert: The world isn’t perfect. We’re buffeted from birth with commercials, billboards, product placement and other buy-buy-buy messages.

Here are four simple, effective tactics to help you break that cycle.

1. Take a break from social media.

Out of sight, out of mind, right? If you don’t see that new smartphone or sports car, you’ll be less likely to come down with a bad case of I-want.

That said, it can be hard to break the habit of keeping track of family and friends via Facebook, Instagram, or other platforms. Give it a try, starting with just one or two days away from the virtual meetinghouse.

Can’t do it? Allow yourself a set amount of time – say, half an hour after dinner – and set a timer to keep yourself honest.

Best-case scenario: You find you don’t miss Instagram et al. as much as you thought. In that case, stay gone – and use the time you would have spent in more practical and satisfying ways.

Another option: Develop a new lens for the loot you see on social media. Practice saying this phrase out loud: How nice for them – but right now, that trip to Cabo isn’t in my budget.

Remember, too, that people put the best stuff on social media and they curate the heck out of it. That perfect beach shot may not reveal the clouds that rolled in an hour later, the sand fleas, the trash along the waterline, the parking ticket your bestie got because she lost track of time.

You also don’t know what this picture-perfect life costs. Mr. or Ms. EnvyMyLife could be dodging creditors and/or fighting about money with their spouse. That’s a stressful way to live, to say nothing of the opportunity cost of spending every penny you earn.

2. List your life goals.

Where do you want to be in 10 years, or even in two? As many answers exist as there are individual circumstances. A few popular examples: Traveling. Being debt-free. Living in a new place. Raising a kid. Turning a passion into a fulfilling career.

Having a plan for the future means envisioning what that future could look like. Don’t know how to get started? Consider this saying: “What would you attempt if you knew you could not fail?” Write down your answers, then start brainstorming ways to achieve them.

Do this with friends or secretly, on a whiteboard or a legal tablet. Some people call this a vision board, others call it a life map. Call it whatever you want, or don’t call it anything at all – but do create one. It’s hard to work toward a future if you don’t have any goals.

Your dreams might sound completely different than those of your family and friends. They’re your goals and you don’t have to justify them – or even to share them. But you do have to speak them out loud to yourself.

3. Build a budget.

Incorporate those dreams into a spending plan that works for you. While you’ll want to prioritize things like retirement savings and debt pay-down, leave room for goals like travel, parenthood, homeownership, or whatever floats your boat. (Maybe owning an actual boat is one of those goals. Your dreams may vary.)

First things first: You shouldn’t be shopping for a Chris-Craft if you’re carrying a lot of debt or haven’t saved a dime for retirement. But every budget should include a “fun” category, for dinners out, movies, sporting events, and other not-strictly-necessary things that make our lives better.

Create additional categories that fit your life – a college fund if you’ve just had a child, say, or setting aside a certain monthly amount in order to start your own business in five years.

The 50/30/20 budget works for a lot of people: Spend no more than 50% of take-home pay on essentials (housing, food, etc.), 30% on wants and 20% on saving (debt service, putting money away for emergencies or retirement).

Feel free to tweak it in ways that also work for you. Perhaps you can cut food and housing costs by learning to cook or living with roommates, or reduce transportation and insurance spending by keeping your car for 10 years or more, or even becoming a one-car household.

Other budgeting tactics exist, too. Find one that fits.

4. Look for help.

Resisting the dominant paradigm is easier when buddies have your back. Surely not all of your friends are overspending their way through life. Find pals who can look beyond the here and now, and start talking.

Talk about those life goals. Talk about ways to pay down debt. Talk about how to live the best lives you can on the money you currently have, without losing your dignity or your hopes for the future.

Talk each other down when you’re tempted to bust the budget. Talk about your dreams, and list the steps you’re taking to achieve them.

Look for help in other ways, too. Visit message boards and blog forums devoted to escaping the consumerist mindset. Read books on personal finance and those that focus on building the life you want. (Pro tip: Look for them in the library – and if you can’t find the titles you want, request an inter-library loan.)

The Bottom Line

Social media is a great way to stay in touch with what friends are doing and saying. It’s also a chance to share personal finance tips, or to get the support you need from other frugalists who, like you, want to get control of their cash.

Use social media in other money-smart ways, too. Looking for a reliable used car? Put it out there! You may find that someone’s hairdresser’s cousin’s next-door neighbor is selling a two-year-old vehicle that’s mostly been driven to church and the grocery store.

The e-universe could also help you meet your household’s needs for little or no money. Check out resources like Facebook yard sale pages or one of those “Buy Nothing Day” groups and watch your dollars s-t-r-e-t-c-h.

But when your screen looks mostly like a parade of Things You Haven’t Got, leading you to play catch-up, then it’s time either to back away or to adjust the way you interact with social media. The tactics listed above will strengthen your resolve to live your own life and achieve your own dreams, vs. trying to keep up with someone else’s.

Veteran personal finance writer Donna Freedman is the author of “Your Playbook for Tough Times: Living Large on Small Change, for the Short Term or the Long Haul” and “Your Playbook for Tough Times, Vol. 2: Needs AND Wants Edition.”

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Donna Freedman

Contributor for The Simple Dollar

Award-winning journalist and veteran personal finance writer Donna Freedman is the author of “Your Playbook for Tough Times: Living Large on Small Change, for the Short Term or the Long Haul” and “Your Playbook for Tough Times, Vol. 2: Needs AND Wants Edition.” A former full-time reporter for the Chicago Tribune and Anchorage Daily News and longtime columnist for MSN Money, Freedman has also written for Get Rich Slowly, Money Talks News, and other publications