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Budgeting

Is social media wrecking your budget?

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In a word? Yes. But first, let’s take a moment to enjoy what social media has given us—the ability to connect with others, find support, build and maintain relationships, and explore new things we’re interested in, to name a few.

Social media apps have also  turned our phones into small personalized shopping malls, often with what seem like amazing deals. While that provides a degree of ease to obtain the things we want, it also can lead to overspending and making us feel like we need to purchase things that we probably could live full, happy lives without. 

For instance, you probably didn’t even know you wanted recycled-fiber yoga leggings, but now you own 2 pairs. Perhaps it’s that can’t-pass-up $200 deal on a tablet or a new monthly vitamin subscription that promises endless health benefits? Done and done. Today, apps like Instagram function like the malls of yesterday, and then some.

4 hours of shopping, every day

Would you typically spend 4 hours or more shopping at the mall every day? Because that’s what many of us are doing with social media.

Nearly half of college-educated millennials (47%) spend between 1 and 4 hours a day on social media, and 21% spend more than 4 hours daily on various social platforms, according to a recent survey of 1,000 people conducted by Propeller Insights on behalf of Varo1.

Here’s the kicker—after viewing social media, 38% say they are more likely to make a purchase and 41% of people have made a purchase to feel better about their own lives, according to the survey.

“Social media and cloud-based shopping has been great because they allow for better consumer research to compare prices and find items that are closer to what you need or want,” says Abel Soares, a Certified Financial Planner based in Hawaii. “The heavy downside is that social media purchases can be impulse purchases.”

If you’re trying to watch your budget and save money for bigger financial goals in life (like a down payment on a home, furthering your education, or even just paying off credit cards or loans), it might not be about spending less money, but rather about spending less time on social media.

Tap to buy

On social media, converting advertising into a purchase has become very slick and often even hard to notice. Tap “Shop Now” on Instagram and you’re immediately at check out. Or it might be as simple as texting a “Yes” back to a retailer’s message about whether you want to make a purchase. While social media and technology have made all sorts of things incredibly convenient to do, they’ve also made it incredibly easy to lose track of spending.

FOMO or the fear of missing out, as well as the natural urge to compare ourselves to others, is also driving our social media spending. When we start comparing our lives against a friend who appears to spend all their time traveling to exotic locales on Instagram, or someone who’s posting pics wearing the latest trendy sunglasses and eating $200 sushi dinners, suddenly spending on those new shoes or bathing suit to perk ourselves up at the click of a button can seem very reasonable.

A money-healthy feed

So, it might be time to put our money and our social media into a bit of marriage counseling. Here are a few ideas for building a healthier relationship between the two.

Pause before buying. Take a 24-hour timeout before making a purchase. Any sense of urgency you see—a limited-time flash sale, an “only few left in stock” tagline, or repeat advertising—is simply a gimmick to get you to buy immediately. Chances are that sale will come back around if you really want the item.

Edit your social feeds. Are there some people or brands you follow that make you feel worse about yourself or create FOMO? Unfollow them immediately and in no time you’ll probably even forget who they are. Substitute these accounts with people and companies that promote a positive, supportive message and make you feel better, not worse, about your life.

Unsubscribe to emails. If you use Gmail, most of the marketing emails you receive are probably funneled into your Promotions tab. To the best of your ability (we know it can be an uphill battle) unsubscribe from the ones that seem to get you to spend impulsively. For example, if getting emails from REI or Gilt triggers your interest in some casual afternoon shopping, unsubscribe.

Be selective with referral codes. Referral codes can be great when you actually need something useful, but don’t buy something simply because you have a discount. For example, spending $130 on shoes you don’t need just because you have a $50 discount is still $130 you might not have spent otherwise.

Create friction for online shopping. Just as digital brands have made it easier than ever to purchase something, you can, on the flip side, make it as hard as possible for yourself to do it. Delete your connected credit card information so that every time you want to make a purchase you have to think twice before grabbing your credit card from your wallet.

Use notifications set on your credit or debit card. Ideally, your bank account or credit card will let you set up an alert when your balance reaches a certain level. This may help prevent you from making purchases with what feels like “play money” or disposable income.

Unless you feel like you can’t manage your social media shopping tendencies, no one is suggesting you delete all your social apps immediately. As we mentioned before, there are some definite upsides to social media, and it’s also become a great way to support the charities and worthy causes that speak to you. In fact, 41% of college-educated millennials have donated to a charity they saw advertised on social media, according to the survey.

In the end, if you have an impulse-shopping mindset, it’s easy to do it anywhere, even if it isn’t through social media. The trick is to reduce the chances that you’ll make purchases on a whim without considering how they’ll affect your budget. Before making any purchase that gives a temporary thrill, ask yourself if it’s a want or a need, and consider all of the other more productive ways you could spend or save your hard-earned money. 

1 2018 survey for Varo conducted by Propeller Insights of 1,000 people

Unless otherwise noted above, opinions, advice, services, or other information or content expressed or contributed by customers or non-Varo contributors do not necessarily state or reflect those of Varo Bank, N.A. Member FDIC (“Bank”). Bank is not responsible for the accuracy of any content provided by author(s) or contributor(s) other than Varo.

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