By now it’s pretty well established that one of social media’s key applications, in addition to keeping in touch with friends and sharing cat pictures, is showing off by posting photos of expensive purchases and exotic vacations, contributing to a cycle of envy-inspired spending. In fact, it’s such common knowledge even your accountant knows what’s happening.
Yes, the green visors are on to us and our online-enabled profligacy. On that note the American Institute of CPAs commissioned a survey of 1,012 American adults by Harris Poll to determine just how widespread the phenomenon really is.
According to Harris and the AICPA two-thirds of respondents (67%) had a social media account, and around half of these (48%) said they check their favorite social media sites more than once a day.
Moving on to the whole spendy spendy spendy thing: 47% of American social media users said they have posted pictures of their vacations at some point over the last year, and 39% said that seeing pictures of vacations or purchases on social media make them consider making similar purchases themselves.
That’s good news for brands, suggesting social media is indeed an effective marketing platform, but it’s maybe not always so great for our emotional wellbeing: 25% of American social media users surveyed said they felt envious after seeing other social media users’ posts about a purchase or vacation at some point over the past year, and 21% admitted they are more likely to choose an activity or purchase based on how it will appear to other social media users.
Unsurprisingly, these tendencies are more pronounced among younger adults who grew up with social media. Here, 37% of Millennial respondents said they felt envious of other social media users’ vacations or purchases, compared to just 15% of Baby Boomers, and 26% of Millennial respondents said their purchases were influenced by the desire to impress other social media users, compared to 12% of Baby Boomers.
The problem is serious enough that some people are at risk of making purchases they really can’t afford, according to Gregory Anton, chair of the AICPA’s National CPA Financial Literacy Commission, who stated: “Social media has vastly expanded the number of ‘neighbors’ people are trying to keep up with. That can lead to a feeling of financial inadequacy and a desire to spend money you may not have. Some people are purposefully curating a more glamorous image on social media and, unfortunately, it can have a negative financial impact on their friends and followers who feel compelled to keep up with them.”
In case this wasn’t clear enough, Anton added: “People, in particular those just beginning their careers, would be better served spending their money maxing out their 401(k) and paying down debt instead of trying to one-up their friends on social media. While smart financial moves may not get the most likes or retweets, building a solid financial foundation should take priority over building a social media following.” Ahem.