Comparing ourselves to others is hard to avoid, and hard on our finances. Depending on how much you use social media, you may receive nearly constant updates about your friends’ latest vacations, home remodeling projects, or purchases. If you’re not careful, it can lead you to overspend.
Millennials (people ages 24-39) are especially vulnerable. According to several studies, young adults spend more time on social media than older generations and are more likely to say they’ve spent money they hadn’t planned to spend because of something they saw on social media. A Schwab survey found that while 35% of all adults admit to being influenced by social media to spend more money than they can afford, nearly half of Millennials (49%) acknowledge being so influenced.
What’s a person living in our always-connected culture to do? Here are some suggestions.
Practice social indifference
Sarah Stanley Fallaw, co-author of “The New Millionaire Next Door,” is picking up where her late father, Thomas Stanley, author of “The Millionaire Next Door,” left off in studying the habits and practices of the wealthy. Stanley Fallaw, who has a PhD in applied psychology, said much has changed since her father’s book was published in 1996.
“I think the difference today is the unending nature of knowing what ‘the Joneses’ do, given technology. Purchases, vacations, educations are all broadcast via social media and other means…The research we’re doing demonstrates that those who ignore trends have higher net worth, regardless of their age, income and percentage of wealth that they inherited. Building wealth means ignoring what others are doing, which may be more challenging today than in the 1990s… you see the importance of social indifference. Do I care what other people are driving, or about trends? That sort of thing.”
But can you really be indifferent about what you see on social media? A key question is whether you can scroll through your friends’ social media posts and simply be happy for them, without being tempted to overspend. You may need to stop following certain people.
Remember who you are
To a great degree, our actions, including our responses to other people’s choices, flow from our identity. Our culture calls us “consumers,” fosters social comparison, and encourages us to make spending our first financial priority. It’s no wonder why it’s so easy to overspend. So, how do we live in this world of ours, without being of it—without being negatively influenced by it?
As Christ-followers, a good place to start is to remember that our financial identity is that of a steward or manager of God’s resources, as depicted in the Parable of the Talents (Matthew 25:14-30.)
Jesus used the parable to convey some very powerful truths. God is the owner of everything. He has temporarily entrusted some of what he owns to us. As we prove faithful in managing what he has entrusted to us, he will entrust us with more. And one day he will return and take account of how well we’ve managed his possessions.
When you’re weighing a financial decision, it can be helpful to ask yourself, “What would a manager of God’s resources do?”
Know what you’re about
God’s Word teaches a very counter-cultural approach to money where living generously comes first, providing for our families by building a reserve and investing for the future come next, and avoiding what it describes as the bondage of debt is important. Proactively choosing those priorities before seeing how much is available for lifestyle spending is an important key to living within our means.
Understand where you are
From a very practical perspective, using a cash flow plan makes it easy to see whether you can afford something. Once you create a plan with a tool such as mint.com, showing how much of your monthly income you have allocated to groceries, clothing, vacations, and all the rest, and assuming you are tracking your cash flow, your plan will tell you anytime, anywhere how much you’ve spent in a given category compared to how much you planned to spend.
When you see something you’d like to buy, such as an article of clothing, just check to see how much of your clothing budget you have left to spend this month. If you have money available, go ahead. If not, wait until next month.
The pressures to overspend are all around us. But remembering who you are, being proactive about your financial priorities, and using a tool like a cash flow plan are three important steps you can take to live within your means no matter what’s trending on social media.
Matt Bell is the author of Trusted: Preparing Your Kids for a Lifetime of God-Honoring Money Management. He speaks at churches and conferences throughout the country and writes the MattAboutMoney blog.
This article should not be considered legal, tax, or financial advice. You may wish to consult a tax or financial advisor about your individual financial situation.