Tag Archives: social media

Four ways social media affects our spending

Social media could be influencing us to spend impulsively!

Can social media use be linked to spending? Research shows it can. For example, one study found that social networks such as Facebook and Instagram can motivate impulsive buying behaviours.[1]

But just exactly how does social media affect our spending?

1. Advertising

Sites like Facebook and Instagram have evolved from social networking platforms to powerful advertising tools. (I remember fondly when Instagram was purely a photography site… sigh!)  We only need to look at our social media feeds to realise how businesses use targeted advertising to expose us to brands, products and services. Targeted posts are effective at getting us to spend because they’re typically developed based on our demographics and even our behaviours.  They aren’t called ‘influencers’ for nothing!

2. FOMO!

Social media creates a tendency among users to compare their lifestyle to those of others.  You know, those beautifully curated feeds that make you feel like a complete failure at nearly every part of your life? your house? your wardrobe? your socials? This comparison can trigger a ‘fear of missing out’ or FOMO, leading us to buy and consume just to fulfill the urge to keep up with everyone else.  Leave that behind!

3. Encouraging imitation

Images of products or aspirational lifestyles posted on social media by people we respect or admire might influence us to spend unnecessarily or indulgently.  Be wary! This can happen when we look to them (celebs, sports starts, influencers etc) for cues or guidance when we don’t know how to act and simply copy what they’re doing. Psychologists call this social proofing.[2]

4. A seamless shopping experience

Social media platforms can also encourage spending by also providing a seamless shopping experience. As an example, Facebook enables retailers to sell on the platform itself, and Instagram allows links to products and services mentioned in posts so users can purchase them online. This makes it extremely easy to spend!

I’ve been sucked in with those great outfits pictured on Insta, that arrive from China and would be hard pressed to fit a primary school aged child, let alone the curvy woman who ordered them!  And getting your money back… seriously!!!

Making smart choices

Social media can help us make better choices by exposing us to more products and services and enabling us to learn about other people’s experiences using them. It can also save us a fortune if we can compare retail vs Gumtree or Ebay and know what we’re looking for and can compare what’s in front of us.

But it can also influence us to spend unnecessarily or impulsively.  So, be aware!

By setting financial goals, you can make smart choices with your money. Your professional financial adviser can help you get started by creating a plan and budget to help you secure your financial future.

 

NOTES

[1] Aragoncillo, L, 2018, ‘Impulse buying behaviour: an online-offline comparative and the impact of social media’, Spanish Journal of Marketing, accessible at: https://www.emeraldinsight.com/doi/full/10.1108/SJME-03-2018-007.

[2] Psychology Notes HQ, August 2015, ‘What is the Social Proof Theory?’, accessible at: https://www.psychologynoteshq.com/social-proof.