Social media application on smartphone screen
Social media is all over the place and covers all the things. People use social media to attach, shop, content, entertain and share information. While among the scrolling is harmless, the hazards of social media have gotten increasingly apparent. This is particularly true with regards to our financial health.
lifestyle inflation, The tendency to extend spending as income increases is nothing recent. However, said James Curry, senior vp, director of wealth management at Greenleaf Trust, explains that social media has made it easier to succumb to the lure of lifestyle inflation. “Social media constantly exposes us to the glamorous lives of others. Carefully curated snapshots of lavish lifestyles fill our feeds as we scroll through social media platforms with images of luxury vacations, designer wardrobes and extravagant dining experiences.” This results in an unrealistic, inflated and inaccurate perception of wealth. Curry believes this constant exposure to oversupply can subconsciously cause us to adapt our spending habits to the experiences we see online.
“As individuals strive to maintain an appearance that meets the inflated standards of social media, debt is often the result. The pressure to live up to unrealistic standards can push individuals into debt.” The result, Curry said, is commonly high-interest bank cards and loans which are used to keep up an unsustainable lifestyle in the long run, affecting their financial stability and their future lives Targets jeopardized.
To avoid these pitfalls and the financial pressure attributable to social media, Curry recommends setting clear financial goals and balancing your short-term fun without compromising your long-term goals.
In addition to the hazards of lifestyle inflation, social media also poses a threat on account of the vast amount of economic content and advice that could be found online. A recent survey commissioned by Forbes Advisor and conducted by market research firm Prolific shows that 79% of Americans within the Millennial or Gen Z age groups have received financial advice via social media
Although there are various “Finfluencers” who provide great advice, educate users, and create a positive impact, it’s best to all the time consider the source and motivation before making financial decisions. Things to look out for are:
- Anyone who sells or promotes a financial product. That’s to not say the product is a foul idea, but do your research before purchasing anything. Check out the posters’ credentials and see in the event that they receive a commission.
- “Hacks” to get out of debt or “get rich quick” schemes. Unfortunately, there are only a few shortcuts with regards to financing. And if someone had a strategy to actually get wealthy quick, why would they monetize it?
- “Guaranteed” returns or results. With just a few exceptions, there aren’t any investment guarantees. The nature of investing is risk. The greater the danger, the greater the potential profit (and loss).
- Financial courses. There are some really beneficial specimens here too. But before you pay for “expert” advice, be sure that it’s an authority.
But it isn’t all bad and ugly – social media has done numerous good for our financial lives. Financial influencers normalize talking about money. They make finance comprehensible to everyone and even (dare I say) “cool” to younger generations. This is a giant step forward from how millennials and older generations were raised when talking about money was considered taboo. Generation Z and Alpha are acquainted with all sorts of economic concepts, have more knowledge, and recognize the importance of economic education and responsibility. The same survey shows that 76% imagine financial content on social media has made talking about money less taboo, and 62% feel empowered by access to financial advice on social media.
Even though there are all the time bad times, there are various finfluencers who encourage people by motivating them to take control of their funds and make changes to be financially healthy.
