Four Ways Social Media Can Hurt Your Financial Plan

A few years ago, if someone asked me what’s the best material thing I’ve ever purchased, my immediate response would have been: 1) my Tempur-pedic bed and 2) my iPhone.

Today, my sturdy mattress would still top that list, but I’m having serious doubts about the smart phone. Not because I have a problem with Apple products – in fact, I’m still continually amazed by its ability to beam photos to far away places with a simple touch or how in the world I can face-time people across the globe within seconds – but because I’ve realized that having 24/7 access to technology and social media is more often a curse than a blessing.

It’s not that far-fetched to say that I was addicted. Like many people I know, I was always on my phone. I reached for it first thing in the morning and it was often the last thing I checked at night. I took it with me when I walked my dog, and ran at the gym. Although I was pretty good initially about not checking it when I was with other people or at meals (how rude!), it slowly made its way in and became a permanent fixture.

Luckily, I staged my own intervention and curbed my phone usage significantly. Within hours, I felt so much happier and more focused (now if I could only get my kids to do the same thing!).

So, whether it’s an iPhone or some other device, I’ve come to realize that, if you’re not careful, technology and social media can do more harm than good.

Over the years, there’s been more and more research on how 24/7 access to news, events, people, friends, etc. through technology and social media can affect our ability to focus and make true connections.

I also think it could negatively impact your finances. Whether it’s Facebook or Instagram, a Galaxy or a Motorola, here are four ways social media or technology may be hurting your money goals:

1) Keeping up with the Joneses: It’s no surprise that social media can exacerbate our feelings of envy, desire to compare ourselves to others and the need to keep up with our peers.

As people post only their “best” selves and selectively edit out anything less than a perfect picture of their lives, you may find yourself feeling the need to “catch up” and veer off your own path and goals. Be mindful to stay in your own lane and resist the urge to compare.

2) Ads, ads, everwhere!: Along the same lies, you may find yourself being tempted to spend money on things that are not within the budget you’ve created for yourself, due to a bombardment of ads and strategic ad placement.

We’ve all found ourselves there – we innocently look up “summer dress” while we are standing in line at the grocery store, and then all of a sudden, there are clothing ads everywhere  when we’re scrolling through our feed or innocently reading the morning’s news.

3) Do this! No, do that!: You want to learn about the best way to diversify your investments so you google “Diversification in your 30s.” The good news is that you immediately get advice. The bad news is that you get too much of it!

The problem now becomes who to listen to; there’s so much information available to us, some of which is conflicting. It can be easy to feel overwhelmed, get more confused and not be able to sort out the good information from the not-so-good, leaving you in analysis-paralysis.

4) Consuming, not applying: When we are able to sort out the information in #3 and find the resources/advice we need, a related problem could be that we never end up applying it. With so much information at the tip of our fingers, we can easily fall into the “learning or research” trap, thinking we are taking action on a particular financial goal because we are learning about it when really that’s only one step in the process.

Be careful not to get stuck in this phase of endless researching, learning and consuming information without moving on to the next step of actually implementing. Reading articles about “The benefits of a Roth IRA” or “How to save while still paying off student loans” is not the same as actually opening up a Roth IRA account and contributing to it, or creating a budget and curbing your spending in real time.

Of course, social media and technology are not the “Big, bad wolf.” There are so many benefits to the information and access we have, but it’s also important to be mindful of its potential effects both generally and with regards to your money behavior. Notice if any of the above resonate with you and change your behavior accordingly.

So, while there’s no harm in enjoying your smart phone in moderation and checking in on social media once in awhile, your financial plan may be better off if you invested in a good quality mattress and get a good night’s sleep instead!