In a word? Yes.
But first, a moment to enjoy what social media has given us: Social apps have turned phones into small personalized shopping malls with amazing deals—and it’s sorta awesome.
You probably didn’t even know you wanted recycled-fiber yoga leggings. But now you own two pairs. Or a $200 deal on a tablet or a new monthly vitamin subscription. Check and check. Instagram is the new Mall of America, and then some.
Four hours of shopping, every day
Yet would you spend four hours or more at the Mall of America shopping every day? Because that’s what we’re doing.
Nearly half of college-educated millennials (47%) spend between one and four hours a day on social media, and 21% spend more than four hours daily on various social platforms, according to a recent survey of 1,000 people conducted by Propeller Research on behalf of Varo Money.
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.
OMG. Seriously. If you’re trying to watch your budget and save money for bigger goals in life (a home down payment, more education, pay off student loan debt), it might not be about spending less money but about spending less time on social media.
“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.”
To be sure, it’s not exactly clear how much people spent shopping through social media last year but we do know how much is being spent on advertising. Facebook raked in $11.97 billion in ad revenue in just the first three months of 2018—and 91% of that came from mobile platforms.
Tap to buy
On social media, converting advertising into a purchase has become very slick. Tap “Shop Now” on Instagram and you’re immediately at check out. Or it might be as simple as texting a simple “Yes” back to a retailer’s SMS about whether you want to make a purchase. This has made tons of things incredibly convenient to do, but it’s also incredibly easy to lose track of spending.
Sahil Vakil, CFP, a financial advisor focused on helping immigrants, such as workers with H-1 visas, with managing their money, says he’s noticed that his clients tend to use Facebook for family exchanges and Instagram to capture their personal experiences.
But that “experiential” channel is also leading to FOMO or the fear of missing out for some—and that is driving spending too.
Start comparing your life against a friend who appears to spend all their time traveling to exotic locales on Instagram, or someone who’s wearing the latest trendy sunglasses and eating $200 sushi dinners, and suddenly spending $75 on some cool house slippers to perk up your own work-a-day life seems very reasonable.
A money-healthy feed
So let’s talk about what we can do to make money and social media a healthier relationship. Here are a few ideas:
Pause before buying. Take a 24-hour timeout before making a purchase. Any urgency you see—a limited-time flash sale, repeat advertising—is simply a gimmick to get you to buy immediately. Chances are that sale will come back around if you really want that item.
Edit your social feeds. Are there some people or brands you follow that make you feel worse about yourself? Create FOMO? Unfollow immediately. The end. Substitute for people and companies that are positive and supportive and make you feel better about your life—not worse.
Unsubscribe to emails. If you use Gmail, most of the marketing emails are probably funneled into your Promotions tab. To the best of your ability (we know it’s an uphill battle) unsubscribe from the ones that seem to get you to spend impulsively. For example, if getting emails from REI or Gilt Group triggers your interest in some afternoon shopping, unsubscribe.
Be selective with referral codes. Do use referral codes when you need something, but don’t buy something you don’t need just 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 make it really hard for yourself to do it—delete your connected credit card so that every time you want to make a purchase you have to find your credit card.
Use notifications set on your credit or debit card. Ideally, your bank account or credit card will send you an alert when your balance changes to make your purchases feel less like play-money.
The upside of social media
Before you start deleting all your social apps in order to get your budget back in order there is an upside. Social media has also become a great way to support the charities you love—41% of college-educated millennials have donated to a charity they saw advertised on social media, according to the survey.
And in the end Vakil says he doesn’t worry about his clients getting too crazy with social media and shopping. “Instagram is just one more medium. If you have an impulse-shopping mindset, you really can do that anywhere.”
Catherine New is the Editor in Chief at Varo Money. She enjoys #dogsofinstagram, hates #FOMO, and loves thinking of new ways to say hi on Varo’s social media @varomoney.
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