Millennials: Is social media use harming your finances?
The following column from Jennifer Pagliara, CapWealth Senior Advisor, appeared in The Tennessean on September 1, 2017.
How much time do you spend on social media every day? I can feel your dread as you count minutes, which often turn into hours, of your day lost to the online abyss. It is easy to spend five minutes on Facebook while in the checkout line of the grocery store or two minutes on Twitter at a stop light. No judgement from me. I am just as guilty as everyone else.
The tiny computers we have in our hands have led us to escape into other people’s lives, if only for a minute or two, rather than deal with what is in front of us. We can scroll and like people’s pictures rather than process how we feel about events going on in our lives or the mountain of bills piling up. Now I realize that not all of my generation is like that. However, on a whole, I think the habit of escaping to social media is translating into harmful millennial financial behaviors.
Many of you might be scoffing at the idea that the time you spend online has any effect on your finances. However, I am here to discuss how it might be in ways that you didn’t even realize.
We know that money is always one of the top stressors for every generation. However, it is particularly weighing on millennials who potentially don’t have the knowledge or life experience to deal with money issues.
Too much debt is the No. 1 source of financial stress according to Student Loan Hero. When you are young and beginning your career, money is often quite tight. You add a large amount of debt on top of everything, and it can seem impossible to overcome. So what do you do? You ignore it.
I can’t stress enough that you will only make the problem worse by not facing it head on. Get off social media and come up with a plan.
In 2015, Deloitte found that 47 percent of purchases made by millennials were influenced by social media. So not only are we running to Instagram and SnapChat to escape what is happening in our lives, we are also buying things based on what we see on these platforms.
Everyone puts their best self on social media platforms. Even if we think that we are not gullible enough to fall for these advertisements, they are subtly influencing our spending behaviors. It is easy to want to “keep up with the Joneses.” We have all seen a friend or celebrity on social media that has caused us to try and find what he or she was wearing or research what they are selling. Your phone makes it possible to buy whatever you just saw with one click.
Millennials are notorious for spending more money on experiences than other generations, but we also like our conveniences and comforts. Charles Schwab found that we spend more money on coffee, “hot” restaurants and taxis/Ubers than older generations. So the next time you impulsively want to buy something, stop and think if you really need it.
I challenge all of you to be intentional with your saving and to stop escaping what you should be doing today to ensure your future is financially sound. According to a GOBankingRate 2016 survey, 67 percent of millennials between the ages of 25 and 34 have less than $1,000 in their saving accounts and 33 percent have nothing at all.
Break your bad financial habits. Know where you are spending your money and how much you can save each month so that you are not in that 67 percent. Create your financial plan and stay present with it. I know that it’s easier said than done; however, time is your friend when it comes to saving for retirement, so don’t waste it!
Jennifer Pagliara is a financial adviser with CapWealth Advisors.