3 Ways Social Media Is Hurting Americans’ Finances

Social media manager on laptop
Photo by Song_about_summer / Shutterstock.com

How Americans spend their money is being influenced by social media and, for some, it’s hurting their wallets.

That’s according Schwab’s 2019 Modern Wealth Index Survey. The annual survey examined what 1,000 Americans ages 21 to 75 think about their saving, spending, investing and wealth.

And when it comes to the intersection of spending and social media, the survey findings are not good news.

Here are three ways social media is affecting Americans’ finances:

1. Keeping up with the Joneses

Schwab found that more than one-third of Americans admit that social media has influenced them to spend money on experiences — like the experiences their friends share on social media platforms.

The survey describes this influence as “social media envy.”

Terri Kallsen, executive vice president and head of Schwab Investor Services, says of the findings:

“The burden to ‘keep up with the Joneses’ has been part of our culture for decades, but it appears that social media and the fear of missing out (FOMO) have increased the pressure to spend.”

Unfortunately, not keeping up with the Joneses is key to avoiding lifestyle envy in retirement. We cite it in “18 Moves That Will Help You Retire Early and in Style.”

2. Spending beyond their means

More than one-third of the Americans surveyed also admit to having spent “more money than they can afford” in order to participate in experiences with their friends.

Americans blame social media platforms, not people, however.

They rank social media platforms as the biggest “bad” influence on how they manage money. And they rank friends and family as the top “good” influence.

Schwab’s survey is not the first to note financially harmful effects of social media.

In a 2018 survey from Allianz Life Insurance Co., 55% of respondents reported experiencing fear of missing out and 57% said they spent money they hadn’t intended to spend as a result of what they saw on social media.

3. Focusing on spending over saving

More than half of survey respondents said they pay more attention to how their friends spend money than to how they save money.

In fact, 60% of respondents said they are at a loss to understand how their friends can afford the vacations and restaurant meals that they post about on social media platforms.

Perhaps unsurprisingly, many Americans are struggling to save. Schwab found that among survey respondents:

  • 59% live paycheck to paycheck.
  • 44% typically carry a credit card balance.
  • Only 38% have an emergency fund.

They also spend close to $500 per month on “non-essential items,” on average.

Do you get “FOMO” when you use social media? Talk about it with us on our Facebook page.

Disclosure: The information you read here is always objective. However, we sometimes receive compensation when you click links within our stories.

Read Next
3 Ways to Downsize Your Life to Save Money, Time and Stress
3 Ways to Downsize Your Life to Save Money, Time and Stress

Downsizing can cut the bloat in your finances — and give you more free time and less stress.

The 3 Worst Money Mistakes You Are Making at the Gas Station
The 3 Worst Money Mistakes You Are Making at the Gas Station

Beware these cash-guzzling missteps when you stop at any gas station.

Don’t Toss These 7 Household Items — Sell Them
Don’t Toss These 7 Household Items — Sell Them

Here’s how to earn cash as you give new life to these unwanted items.

10 Common Expenses That Have Skyrocketed for Seniors
10 Common Expenses That Have Skyrocketed for Seniors

Retirees must stretch their dollars further and further these days — no thanks to these costs.

7 Bank Accounts With Extra Perks for Seniors
7 Bank Accounts With Extra Perks for Seniors

These accounts offer exclusive discounts and other perks — including interest — to older customers.

View this page without ads

Help us produce more money-saving articles and videos by subscribing to a membership.

Get Started

Most Popular
7 Kirkland Signature Items to Avoid at Costco
7 Kirkland Signature Items to Avoid at Costco

Even if it seems you save a bundle buying Costco’s Kirkland Signature brand products, they may not be the bargain they appear to be.

How to Buy Gas At Costco Without a Membership
How to Buy Gas At Costco Without a Membership

The warehouse club often has some of the cheapest gas in town. Here’s how you can get it as a nonmember.

10 Things to Stop Buying If You Want a Clutter-Free Home
10 Things to Stop Buying If You Want a Clutter-Free Home

If you like to keep things simple, avoid these purchases.

If You Find This Thrift Shopping, Buy It
If You Find This Thrift Shopping, Buy It

Vacuums from this brand can last a half-century, if not longer — and they’re hot on the resale market.

A Simple Way to Silence Robocalls Today
A Simple Way to Silence Robocalls Today

A few steps can keep your phone from ringing when a spammer calls.

This Company Makes the Best Tires in America
This Company Makes the Best Tires in America

Driver satisfaction with tires is at an all-time high, but one brand stands out.

This Health Issue Can Hint at Dementia Years in Advance
This Health Issue Can Hint at Dementia Years in Advance

One type of pain is especially associated with cognitive decline.

Can I Switch to Spousal Social Security Benefits When My Ex Dies?
Can I Switch to Spousal Social Security Benefits When My Ex Dies?

Knowing when to claim can help you maximize benefits.

If You Find This Thrift Shopping, Buy It
If You Find This Thrift Shopping, Buy It

This iconic dinnerware is prized for everyday use as well as reselling for profit.

Medicare Will Not Cover These 6 Medical Costs
Medicare Will Not Cover These 6 Medical Costs

Don’t let these health care expenses catch you off guard in retirement.

8 Things You Should Always Buy on Amazon
8 Things You Should Always Buy on Amazon

The giant retailer shines when it comes to these things, from basics to hard-to-find specialty goods.

Beware This Hidden Ingredient in Rotisserie Chicken
Beware This Hidden Ingredient in Rotisserie Chicken

Something foul may lurk in those delicious, ready-to-eat birds.

5 Ways to Get Amazon Prime for Free
5 Ways to Get Amazon Prime for Free

Hesitant to drop $119 a year on an Amazon Prime membership? Here’s how to get it for free.

5 Ways to Fill Your Pantry With Free Food
5 Ways to Fill Your Pantry With Free Food

Anyone can take advantage of these resources.

5 States With the Worst Health Care for Retirees
5 States With the Worst Health Care for Retirees

All of these states are located in the same region of the nation.

3 Ways to Get Microsoft Office for Free
3 Ways to Get Microsoft Office for Free

With a little ingenuity, you can cut Office costs to zero.

12 Deep Discounts Available on Amazon This Friday
12 Deep Discounts Available on Amazon This Friday

These items are steeply discounted — but the deals won’t last long.

6 Reasons You Should Stop Hiding Cash at Home
6 Reasons You Should Stop Hiding Cash at Home

Stashing money around the house is anything but harmless.

7 Big Purchases You Should Never Make
7 Big Purchases You Should Never Make

Sometimes a big-ticket purchase is nothing more than a big waste of money.

View More Articles

View this page without ads

Help us produce more money-saving articles and videos by subscribing to a membership.

Get Started

Add a Comment

Our Policy: We welcome relevant and respectful comments in order to foster healthy and informative discussions. All other comments may be removed. Comments with links are automatically held for moderation.