Do you remember that old saying, “Keeping up with the Joneses?” It’s been a long time since I’ve heard it and I expect it’s because it’s a bit dated. The origin of this idiom is from a comic strip named “Keeping up with the Joneses” that ran from 1913 to 1940 and followed the McGinis family who was climbing the social ladder and measuring their life against the Joneses down the street. The Joneses had the best of everything: biggest house, newest cars, finest clothes, and the best vacations. The comic strip showed what the McGinis family did to try to keep up with the Joneses even though they couldn’t afford it. Why? Because it was implied that not keeping up meant you were less of a person and couldn’t measure up to the Joneses.
This saying may have gone by the wayside but the phenomenon is still with us, it just looks a little different. Instead of people trying to keep up with their neighbors, they’re trying to keep up with others on social media. The Joneses have been replaced with influencers and celebrities, and even friends and acquaintances. Perhaps the new saying should be, “Keeping up with the Influencers?”
Studies show that people spend more money the more time they spend on social media. A study by Mint.com found that “40 percent of Americans admit to purchasing an item or experience after viewing something similar on social media.” Clothing and accessories are the most popular items purchased. Researchers at the University of Potsdam reported that those who are on Instagram more often showed a higher preference for buying luxury branded products they can’t afford. This is attributable to conspicuous consumption by Instagram influencers. Other studies have shown that envy fuels people’s intention to pay more for a high priced product in an effort to get them closer to whomever they hold in high regard. Today’s social media consumers are the new McGinises trying to keep up a lifestyle they can’t afford.
This all makes sense if you’ve spent any time on social media. Everything seems to be perfect so why not make your life perfect too? This is the psychology of influence spending. By buying things that others have, the belief is that one’s own value and social standing will improve. And this is before we account for direct advertising.
In the United States, social media advertising revenue is expected to top $56 billion in 2021 and projected to grow to $295 billion in 2025 for sites like Facebook, LinkedIn, and Instagram. Those are billions with Bs! According to Forbes, the typical return on advertising is between 5 and 30 times what is spent, with some marketing campaigns returning over 75 times spending — that means that for every $1 paid to Facebook for ads, $75 in sales is received. These high rates of return on advertising dollars are possible because the ads can be targeted to audiences with precision. You may have noticed that if you search for something or look at an item on a site, you start receiving ads about that item or something similar. That’s targeted marketing made specially for you to get you to buy and it’s a powerful pull.
For most people, the crush of social media images of perfect lives, expensive items and excess, along with targeted and sophisticated advertising, is almost too much to bear. It’s easy to fall prey to the pressure but hugely detrimental to your finances. However, it isn’t a foregone conclusion that you can’t be on social media without overspending. Here are things you can to do protect your finances:
Limit your screen time: Time on social media is tied to the amount of spending so reducing your time online will reduce your exposure and the likelihood of overspending. Set a timer or only peruse during certain times of the day.
Create a budget if you don’t already have one: Having a budget and knowing how much you can spend on discretionary items will help you stay within bounds. Don’t have a budget? We can help. Check out our Ideal Budget to get started.
Don’t compare yourself to others: This is a tough one but it can be done. Look inside and realize your own value. You don’t need what others have to make you happy and I can promise it doesn’t work.
Adjust what you look at: Change who you follow or modify your feeds to bring you information that fits your hobbies or interests, or things that make you happy. If you like to hike, follow hikers or if you want to learn about money, follow money sites like Pete the Planner. Most of all, follow what brings you joy instead of sites that make you feel like you’re missing out.
*If you’re struggling to get your spending back in order, let us help.
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Gayle Evezich, AFC® is a Senior Financial Concierge at Your Money Line and personal finance author. Gayle’s greatest joy is to help others find comfort with their money through financial empowerment. When not working or donating her services, you can find Gayle hiking, cooking creative vegan food, traveling or reading scandalous murder mysteries!