Social media influences society in an assortment of ways. Within the past decade, related platforms have swayed elections, outed celebrities’ poor behavior, and controlled much of the public discourse. It even has a significant impact on people’s moods.
Therefore, it’s no surprise that social media also affects many US citizens’ financial decisions. But how much clout do Facebook, Twitter, Instagram, Snapchat, and all other platforms carry regarding money?
This blog will examine social media and its sway over financial decisions:
Social Media’s Financial Influence is Generational
In 2021, consumers gather financial product information from places such as Facebook. They might double down with a blog to inform themselves more.
However, the stats skew toward proceeding with caution with regards to trusting sources. Only 23% of surveyed consumers are very confident that social media information about financial products is accurate and reliable.
Furthermore, consumers only click on social media financial product advertisements 15% of the time. This number pales compared to the 34% of the time people click on ads for other items.
It does appear that older consumers are responsible for swaying these percentages. Millennial – and younger – consumers have far more confidence in the financial information they access on social media. They’re also likelier to click on advertisements for relevant institutions.
This difference between generations probably results from familiarity and comfort with technology. It also likely results from more eagerness to learn about what’s out there in the world of finance.
People Are Spending More Recklessly Because of Social Media
Financial decisions aren’t solely based on products from a bank, an accountant, or overall investing decisions. Finances are involved whenever somebody spends money.
In that vein, social media brings with it some negatives. Namely, 35% of respondents to one survey claimed to spend more money than they could afford to share experiences with friends. Moreover, these decisions were directly influenced by what they saw on social media.
In bringing this blog back to the generational theme, younger people were more impacted by the above problem. 48% of Millennials and 41% of Gen Z fell victim to overspending because of social media’s somewhat nefarious influence.
People must keep in mind that social media often paints a very one-sided picture of people. Sure, your friends could be vacationing in Spain—but they might be maxing out their credit cards to do so. Or they’re neglecting their retirement savings.
Social Media’s Impact on Your Finances Depends on How You Use It:
Social media is a double-edged sword for finances. Provided you allow it to influence overspending because you want to fit in with your friends, it will turn into a negative by accumulating credit card debt.
Conversely, social media brings with it the following financial advantages (if you do your research):
- Find better deals on products you need
- Receive discounts from your preferred stores
- Market a crowdfunding campaign
- Learn about DIY ideas instead of spending on a service
- Perform product research to make purchases that bring you value
It’s through the above methods that social media can become a positive force for your financial future.