Personal Finance

Money at 30: How Social Media Can Influence Your Finances

I hate social media — don’t you? Yet, if you’re like me, that disdain hasn’t stopped you from using it on a daily basis even when you know you could be doing something better. Given that it’s such a source of distraction, it made me wonder whether social media might actually be affecting my finances.

Admittedly it seems that these days social media gets blamed for just about everything. Whether some of those criticisms are warranted or not, I do believe there are a few ways that spending time on such platforms can actually impact your personal finances. To prove my point, here are some examples:

The Instagram Effect

First up is something I like to call “The Instagram Effect.” Although other platforms are culpable as well, Instagram stands out as a place where friends and strangers share photos of all the expensive meals they eat and the incomprehensibly awesome places they’ve visited in addition to showing off the flashy fashions they’ve purchased. So what’s the problem? It’s essentially a 21st-century version of the age-old “keeping up with the Joneses” dilemma; in order to get those sweet sweet likes, you’ll need to start living large.

Needless to say, this mentality can be destructive for a number of reasons — not the least of which is the toll it can take on your finances. While there are legitimate influencers who now get paid to lead (seemingly) amazing lives, there are plenty of others who are merely spending money they don’t have in pursuit of followers. At the end of the day there’s little wrong with sharing cool photos of the cool things you’ve experienced in your life, but be sure to keep yourself in check and avoid overspending just to impress others.

“I just saw the most amazing thing…”

Another problem that comes with spending too much time on social media is that you’ll be subjected to a huge number of advertisements. In fact, as you may have noticed, platforms like Facebook will often serve you ads for items you’ve recently searched for, making it even harder to resist their temptation. Furthermore a trend that’s been growing over the past few years is for startups to advertise heavily on social media in an attempt to make their products go viral. Sure some of these inventions and upgrades can be clever but do will they really make your life that much better? Perhaps the next time you come across one of these ads it’s better to just keep scrolling.

Building a blog and/or a brand (but beware)

On the other hand, as I mentioned in “The Instagram Effect” section, there are several people who have found success growing businesses and brands on social media. This extends beyond major social stars and YouTubers to small business owners and bloggers who have been able to reach customers and readers effectively thanks to various platforms. There’s no doubt that this ability to be heard is a great thing for entrepreneurs, storytellers, and others, but there is still one potential problem.

Like we’ve seen in the past, the trouble comes when a business owner puts all of their chips in one basket. For example, look no further than the recent Facebook News Feed and YouTube monetization changes to see how relying on platforms you can’t control to build your business can be a dangerous game. That’s why, although these are tools you’ll certainly want to utilize and take advantage off, you’ll also want to diversify your income and business model so that you don’t get wiped out with a turn of the tide.

The potential of your wasted energy

Finally, like I alluded to in my intro, there are times when I become acutely aware of just how much time I waste on social media. Because of this I can’t help but wonder what sorts of amazing things I could accomplish with the time I end up investing in Twitter and Facebook. Granted, in this scenario, social media is really just a scapegoat as there is no shortage of other distractions that could stop me from reaching my potential. Still, if the goal is to remove those hindrances one by one, I’d have to say that social media tops the list.

Social media wields a lot of power in today’s society. As a result it’s no surprise that it can also have an impact on our wallets. Whether this means traps like wasting time and being tempted to spend or positive developments such as the ability to promote your business in a cost-effective manner, it’s time we realize the effect social platforms can have on our finances and so we can act accordingly.

Other Articles by Kyle Burbank