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Debt is often just a click away

by | Nov 30, 2023

How social media can encourage you to overspend and destroy your finances.

How social media can encourage you to overspendOnce upon a time, it was easy to see when you were about to get into debt. You saw cash leaving your wallet and knew from the balance in your account that you needed to stop spending.

With the advent of plastic money, people are often not aware of what they are spending – whether that be on a credit card or a transactional account – which often results in overspending.

When using a credit or debit card, it’s so easy to overspend because you don’t see the money as it leaves your account. This is a sure way of living beyond your means.

Fast forward to today, and the situation is worsened with the rise of social media. People are easily misled into impulse spending by a constant bombardment of smart advertising.

It’s important to remember that a lot of what is projected on social media is not reality. In most cases, those we admire simply show us snippets of their lifestyle and it’s easy to believe that’s their everyday life. Don’t fall for this trap!

Today, social media brings shopping malls into your home 24/7. Buying what you want is just a click away. Yet a simple click could be the beginning of serious financial trouble, especially if you are not disciplined.

It’s too easy to buy what you don’t need with money you don’t have. If you aren’t a disciplined spender, digital impulse buying could see personal debt quickly mounting and even becoming devastating.

“What many people don’t think about when clicking that button is the role social media plays in influencing their buying behaviour, be it positive or otherwise,” says John Manyike, Head of Financial Education at Old Mutual.

“Going online and seeing the flashy lifestyles of others and accessible goodies can trigger the desire to keep up with the neighbours and have people buying items they can’t afford.”

“It’s sad that the first lesson of money management, namely understanding the difference between what you need and what you want, gets ignored when peer pressure and bling come to the fore.”

The hype and feeling of FOMO (the fear of missing out) create a sense of urgency, and the picture is worsened by the many “buy now, pay later” services that allow you to split the purchase price into several interest-free installments. All of this creates a huge temptation to spend money that you simply do not have.

Throw in the recent explosion of online gambling sites, and the picture of online temptation is complete.

But, says Manyike, “the greatest defence against digital or any excess spending is financial awareness. There is no substitute for getting financially educated and building a happy life based on simple money management principles.”

Manyike has some suggestions when it comes to resisting those digital calls to spend.

  • Realise that social media is just a giant billboard. Colourful, enticing digital images are everywhere, however their influence can be avoided if you scroll through sites only to find what you are seeking.
  • Have a list of your “must-haves” and “nice-to-haves” nearby. This will show you immediately what counts and what can be bought later when the budget or wish list allows.
  • Avoid logging on if you are in the mood for some retail therapy. The chances are that you will fall prey to impulse buying.
  • Follow the 24-hour rule: if you see something online that you fancy, take a day to think about it. The chances are that if you were being impulsive, the feeling will have worn off by the next day, and you will no longer consider the item necessary.

“Although social media can influence financial behaviours, the ultimate responsibility for financial decisions lies with the user. Building your financial literacy, setting budgets, and developing careful spending habits can help avoid the potential negative impact of social media on your personal finances.

“If a budget includes money set aside for discretionary spending, then going online to buy something you want will be the pleasure it should be,” concludes Manyike.

This post was based on a press release issued on behalf of Old Mutual.


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Maya Fisher-French author of Money Questions Answered


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