Jul 9, 2021
Keeping up with the Joneses in 2021 is next to impossible when the internet has made us all neighbors, and it’s putting a serious strain on our finances.
More than a third of Americans admit social media has influenced their spending habits, according to a survey from Mint last year — even though 64% wonder how their friends can afford all the glamorous trips and cars they’re posting about online.
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Obviously, competing with an entire social group will burn through your cash fast. But Brent Weiss, co-founder of the financial advisory firm Facet Wealth, says the real mistake is trusting what you see online in the first place.
Here's why killing your feed could revive your bank balance.
Looking through a filter
Weiss says it’s easy to forget that Facebook and Instagram never tell the whole story.
“If we hop on to social media, there’s this different life that’s not reality presented to us… Everyone’s having a $50,000 wedding; everyone’s buying a big grand home,” says Weiss.
“But the reality of it is a lot of people are making very smart, informed decisions. It doesn’t mean they’re not having nice weddings, but they’re balancing that with the rest of their life.”
People don’t post online about their smart investing habits or when they put more money into an emergency fund. And they certainly don't post about how much debt they're taking on.
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A distorted image of your friends’ finances can be especially dangerous when you’re on the verge of a huge, emotional decision, like buying your first home.
“We tend to make very bad decisions as human beings. It doesn’t make us bad people — we just make bad decisions the bigger the decision is,” says Weiss. “If you’re experiencing a high level of emotion or stress, it’s actually proven that we’ll make worse decisions.”
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What’s the antidote?
Weiss says the real problem people have isn’t poor planning — it’s not having a plan at all.
“One of the biggest mistakes we all make is we don’t set proper goals,” says Weiss. “And I say all of us because although I’m a financial planner, I still make mistakes.”
So what does a proper goal look like? The certified financial planner says to ask yourself three questions: what is it, how much is it and when do I need it?
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“Then you can sit down and say, ‘Here’s how much we would need to save for the ideal situation,’ and then you can look at how this impacts the rest of your life,” says Weiss.
“Part of my job is to show you all your options and help you understand what trade-offs might need to be made down the road to help you achieve your goals.”
As for social media, Weiss advocates an “antisocial” policy when it comes to any financial decision. Turn off your phone, stop thinking about what others are doing and focus on your own values and goals.
Emotions are inevitable when you’re planning a wedding or buying a home, but falling back on the plan you’ve created with your financial adviser — or simply having a plan at all — can help cut through the fog.
How to speed up your savings
If you have a number of short- or medium-term goals you need a little budget boost to accomplish, you have a few options to generate extra income right now:
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Slash your insurance premiums. When was the last time you looked around for a better price on your auto insurance? If it’s been a while, it may be costing you more than $1,000 extra every year. Shop around to ensure you’ve really got the best possible rate, then do the same to save hundreds on health insurance, too.
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Save like a pro. Even if you put yourself on a lean budget, you’ll still need to stock up on supplies every now and then. And when that time comes, use a free browser extension that will scour the internet for lower prices and coupons so you’ll never overpay again.
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Take on a side project. Have a special talent, like writing, drawing or voice acting? Remote and gig work is here to stay, so it’s never been easier to start a profitable side hustle and find buyers for your skills.
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Sigrid is a senior associate editor on the Moneywise team, where she has also worked as a reporter and staff writer.
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