According to the latest data, the average amount of time spent on social media worldwide is two hours and 27 minutes, a day in 2022. That’s a lot of time and opportunity for social media influencers and companies to impact how you spend.
Since consumers rely on platforms like TikTok to find information about products and services, more businesses are using it to promote their brand.
The strategies behind using social media to impact your spending
One method businesses are attempting to connect with customers is through social media influencer marketing. But it isn’t just about posting pictures of yourself wearing clothes you bought online.
Companies are paying people to post positive reviews about products and services.
These posts are called “influencer marketing.” In addition, social media content is more trustworthy than traditional advertising, according to the Pew Research Center.
How Using Social Media Can Increase Spending
Social media can lead to increased spending. People who use it tend to spend more money on things like food, clothing, travel, and entertainment, despite living paycheck to paycheck.
Social Media’s Impact on Our Buying Behavior
Social media influences our buying decisions. In fact, according to one study, we’re willing to pay up to $2.50 more per item because of it.
This is particularly true for products like apparel and footwear, where brands work with influencers to boost sales. Between #GRWMs, #TikToKmademebuy and hauls, TikTok trends are able to sell out a product in a split second. Take for example the Student Platform Loafers by Jeffrey Cambell, a Los Angeles-based footwear brand that had more than 4.4 million views
How social media impacts your spending
1) Fear of missing out (FOMO)
Social media makes us think we’re better than others because we know what everyone else is up to. But it turns out that social media isn’t making us happier — it’s just making us feel like we’re missing out.
A study published in the journal PLOS ONE found that people who use Facebook and Instagram are less satisfied with life than those who don’t.
And why wouldn’t they be? They spend hours every day looking at photos of friends and family members having fun while they sit at home feeling sad.
The researchers say that FOMO is one of the main reasons people become depressed.
So next time you scroll through your feed, remember that you’re ok in your space and that even if you cannot attend an event, there will be another time and another event to go to.
2) Targeted ads
Targeted advertising works well for businesses that want to reach people whose interests align with theirs.
For example, a clothing retailer could target women ages 18 to 24 who live within 10 miles of a city center. Or a car dealership could target prospective buyers based on where they’re searching online.
This type of advertising can lead customers to purchase a product they didn’t know they needed.
But tracking how much money you spend on targeted advertising is important because some ads are designed to trick you and change your spending habits.
Look out for pop-up windows that ask you to sign up for a free trial or offer discounts. Also, look for ads that seem too good to be true. If an ad seems like it’s trying to sell you something you don’t need, chances are it is.
3) Selling of your data
People are giving away their own data online. As the old saying goes, “if you’re not paying for the product, you are the product.” While you connect to Facebook friends, LinkedIn connections, Twitter followers, Instagram likes, and Amazon reviews, companies are, in fact paying big bucks for it.
Companies are also selling people’s data to each other. For example, a recent report found that companies like Acxiom, Experian, Oracle, and Salesforce are selling lists of consumers’ email addresses to marketers.
These lists can include names, phone numbers, home addresses, and more.
This trend is likely to continue. One analyst predicts that consumer data bought and sold will reach $20 billion within five years.
4) Monopoly money
Advertising is one of the most powerful forces shaping modern life. But it’s also become increasingly opaque.
Today, advertisers track consumers across multiple platforms, giving them unprecedented insight into what people do, where they shop, and how much they spend.
This data lets companies tailor their messages to individual customers, creating highly targeted advertisements that give consumers an illusion of control over their lives.
Targeted ads but overall less life satisfaction
But there’s a downside to this power dynamic. A growing body of research suggests that the rise of digital media has led to a decline in trust among Americans.
And while some studies suggest that people are becoming less trusting overall, others show that certain groups—such as young adults—are especially distrustful of big tech.
In fact, a recent study found that millennials are far more likely to believe that Facebook manipulates its newsfeed algorithm to favor posts from friends and family over brands. In another survey, nearly half of respondents reported feeling they had no choice but to use social networks.
When people feel powerless, they tend to seek out sources of strength. As a result, many turn to social media to see what their peers think and feel.
For example, Facebook’s News Feed algorithm favors posts from friends and family members over those from businesses.
Twitter’s algorithm prioritizes tweets from celebrities and public figures over those from average users.
For both platforms, figuring out what kinds of content get the most engagement mainly relies on automated methods.
These systems are often difficult to understand. For instance, Facebook uses a complex formula called EdgeRank to decide which stories appear in your feed.
While the company says EdgeRank helps keep your feed relevant, critics argue that it unfairly pushes up posts from well-known personalities and downplays content from smaller publishers.
Signs social media is impacting your finances
It’s no secret that social media can be a huge time suck. But did you know that it can also wreak havoc on your finances? If you find yourself spending more time scrolling through Facebook or Instagram than you are working on your budget, it might be time to take a break from social media.
Here are four signs that social media is negatively impacting your finances:
1. You’re constantly comparing your financial situation to others.
Social media can be a breeding ground for comparison. Whether it’s seeing photos of your friends on vacation or reading about someone’s new car, it’s easy to start feeling like you’re not doing enough with your money. If you find yourself constantly comparing your financial situation to others, it’s time to take a break from social media.
2. You’re spending more money than you can afford.
If you find yourself using social media as a way to keep up with the Joneses, you could be putting yourself in a difficult financial situation. If you’re spending money you can’t afford on things you don’t need, it’s time to take a break from social media.
3. You’re not saving for your future.
If you’re so focused on what’s happening in the present that you’re not saving for your future, it’s time to take a break from social media. It’s important to have a budget and to make sure you’re setting aside money for things like retirement or a rainy day fund.
4. You’re not taking advantage of financial opportunities.
If you’re so busy scrolling through social media that you’re not taking advantage of financial opportunities, it’s time to take a break from social media. There are a lot of great resources out there for people who want to learn more about personal finance. If you’re not taking advantage of them, you could be missing out on some great opportunities.
If you find yourself nodding along to any of these four signs, it might be time to take a break from social media. It can be difficult to disconnect from social media, but it’s important to remember that it’s just a tool. It’s not worth sacrificing your financial wellbeing for.
Strategies for disconnecting from and limiting your social media
Social media platforms are literally designed to keep you engaged, but if you have made the decision to disconnect, there are a couple strategies you can use for success:
1. Avoid social media triggers
Certain things can trigger us to start scrolling through our feeds mindlessly. Maybe it’s when we’re bored, or when we’re procrastinating on something else. Whatever the trigger may be, try to avoid it as much as possible. If you’re bored, find something else to do. If you’re procrastinating, force yourself to start working on whatever it is you’re avoiding.
2. Set limits for yourself
If you find that you can’t avoid social media triggers, then try setting limits for yourself. Decide how much time you want to spend on social media each day, and then stick to it. Once you’ve reached your limit, log off and do something else.
3. Take a break from social media
If you’re really struggling to disconnect from social media, then take a break from it altogether. Delete the apps from your phone, and log out of the websites. This way, you won’t be tempted to spend hours scrolling through your feed.
4. Be mindful of your time
When you are on social media, try to be mindful of your spending time. Set a timer if you need to, and when it goes off, log off. This will help you to be more aware of the time you’re spending on social media, and it will help you to limit your usage.
5. Find other ways to connect with people
Social media isn’t the only way to connect with people. If you’re finding that you’re spending too much time on social media, try to find other ways to connect with people. Spend time with family and friends in person, or reach out to someone you haven’t talked to. You might be surprised at how good it feels to disconnect from social media and connect with the people in your life more meaningfully.
If you’re finding that social media is causing you more stress than it’s worth, then try following these tips to disconnect from it. Just remember that you don’t have to be available 24/7, and that it’s okay to take a break from time to time. Your mental health and finances will thank you.
On the other hand, you could use social media powers for good.
Using Social Media to Strengthen Your Personal Finances
It’s not all doom and gloom, however. Social media can help you to build wealth. Here are some ways.
1. Increase your financial literacy.
Social media is a great way to educate yourself on personal finance topics. There are tons of articles, videos, and infographics out there that can help you learn more about everything from budgeting to investing. And the best part is, most of this material is free! So if you’re looking to improve your financial literacy, start by researching social media.
2. Use social media to find creative ways to make extra money instead of spending money
If you’re looking for some extra cash, social media can be a great place to start. You can use social media to make money, from selling products and services to becoming an influencer. So if you need extra cash, especially during the holiday season, explore the various ways you can make money on social media.
3. Stay up-to-date on financial news.
Social media is also a great way to stay up-to-date on financial news. Whether you’re looking for the latest stock market updates or tips on saving money, there’s sure to be a social media account or group out there that can help you stay informed.
4. Get support from others.
Finally, social media can be a great way to get support from others regarding your finances. There are several financial forums and groups out there where you can ask questions, get advice, and even vent about your money struggles. So if you’re ever feeling lost or confused about your finances, be sure to reach out to one of these supportive communities for help.
Limit the impact of social media on your spending
If you’re worried about wasting money on social media, try to limit yourself to just one hour per day. Also, make sure you spend wisely and save for future expenditures.
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