There is no doubt that social media has a significant impact on our life. How many of you check your phone before you sleep? And how many of you pick your phone the 1st thing in the morning to check the updates?
Let me guess... Most of you do that!
Now, most of you would be active on social media. But do you know that social media has a big influence on your financial life?
So in this article, I have discussed how social media impact your financial life in 5 ways, and in the end, I will tell you what you can do to reduce the influence.
The other day I was exploring smartphones on Amazon and Flipkart. And the moment I opened my Facebook account, I could see the ad for those smartphones in the feed! And guess what! They kept showing the ad for the next few days!
It was so tempting! Although, I was not actively looking to buy the phone, but the ad influenced my subconscious mind to buy the phone. This is a very common situation. In the world of target marketing, it is very easy to target the customer. The moment you see your favourite watch on ecom website, you could see the ad on Facebook and Instagram. They would tempt you with a discount as well as an option to buy it on EMI. And by the time you realize, you would have already entered your credit card detail and made the purchase.
Recently, I was scrolling through my feed and I saw my friend’s post. He was on vacation. It instantly created the urge to go for a vacation.
The moment you see your friend's post having fun in a pub or flaunting the new car, it sparks jealousy! Let's be honest - Our financial decisions are heavily influenced by our peers.
What most people don’t realize is that everyone is painting a rosy picture on social media. The perfect relationship. The perfect shot of some famous location. The perfect physique. When you see your friend having fun on a beach, you feel that your friend is having the time of his life and you are simply wasting your life.
But the fact is that social media is far from reality. There have been cases where the person is looking all happy and enjoying while in reality the person is actually suffering from depression!
Let me share a real incident.
The girl opened her Instagram account and saw this post of her friend. It was her birthday and it looks like her parents have put a lot of effort in her birthday celebration. There was one more post.
A moment later this girl felt that she had seen these photos somewhere. She opened Pinterest and guess what!
Those photos were from Pinterest. Her friend faked her birthday celebration! Just imagine how much people have stooped down in faking their perfect life! They all need attention! And when you see that perfect life, you want the same.
#3 As if Facebook was not enough, Instagram has taken this influence to the next level with the world of Instagram influencers!
Just try to understand the psychology of the influencing. Earlier, you had TV, newspaper or billboards for advertising. This would make you aware of the product or service but not influence you much. Slowly, the companies started celebrity endorsement where they paid Crore to the celebrities just for a few seconds of TV commercials. This had a big impact on our lives. If Amitabh Bacchan is endorsing Bikaji Bhujia or Navratan Oil then you would also want to use the same product.
But Instagram has taken this to the next level. It has introduced an army of Influencers. So if you have an interest in fashion then you would end up following a fashion influencer. Now, that influencer would have the biggest impact on your buying decisions. You would want to look like that person and eventually end up buying the stuff being suggested by the person.
Not only this, if you have an interest in let’s say travelling then you might end up following the travel pages and everyday you see a new post of a travel destination, you would want to go there! This again put a big dent in your pocket.
#4 Next problem with social media is it is extremely addictive. That makes you unproductive. People spent hours and hours scrolling through their feed. The biggest negative impact of social media is that it has killed our patience and concentration level. We are living in the world of instant gratification. We need everything now! Just post the photo and get likes. That’s instant gratification. Today, many people are not able to focus on their work. They would keep checking their Facebook and Instagram feed even while working or studying. According to a study, the concentration level of people is getting reduced day by day due to the high usage of phones. Have you seen someone talking to you and tying a message on the phone? That person looks like a multitasker. Isn’t it? Well, the person is not able to concentrate anywhere.
So how is your concentration level? Are you able to read books? If no, then there is a problem. Today’s generation does not like to read books. Forget about reading books. People don’t even have the concentration level to watch a 10 min video. No wonder, Tiktok became the new sensation before it was banned in India. It captured the mindset of people who can’t concentrate for more than 10-15 seconds.
#5 Social media not only has a big impact on buying decisions, it also has a big impact on your investing decisions. There are thousands of groups on Facebook, WhatsApp, and Telegram, and YouTube channels where people are giving free trading tips to invest money. If today, I make a video on 5 best stocks to invest in, I will get high views as compared to a video where I teach you how to pick quality stocks. The reason is simple- People need shortcuts. They don’t want to learn.
Nowadays, many young folks are falling into the traps of quick tips on social media and investing their hard-earned money without any clue on how the stock market or mutual fund works. They just need high returns in no time. As a result, they end up in huge losses.
So what can you do to avoid being influenced by social media?
Well, the best way is to delete your account. But I know that it is not so easy. Especially because now you are addicted to it.
Next option is to make some ground rules. For example, never use your phone after 9 pm. Or never use your phone while working or studying. Just switch off your phone or put it on silent mode and keep it away so that you can’t access it immediately.
Finally, you need to understand that it is your life and only you can control it. Do you really want to get influenced by a random person on Instagram trying to sell a product? Do you really want to feel jealous by looking at your friend’s post?
Just figure out how much time you spend on your phone? And is it worth it? Do not let social media control your life. Especially your financial decisions.
I personally like to keep myself productive. For example, instead of Facebook or Instagram, I prefer using Quora where I can learn something. Or I would like to watch a YouTube video where I can either learn productive things or enjoy watching stand up comedies. Even on Facebook and Instagram, I follow inspirational people like Abdul Kalam, Ratan Tata, etc.
Earlier, they used to say that “Show me your friends and I will tell you who you are. But now, it goes like this - Show me your social media account and browsing history and I will tell you who you are!"
By the way, there is a documentary on Netflix: “The Social Dilemma”. I would strongly recommend watching it. You won’t believe that even the senior executives of these social media companies do not allow their children to use social media. In fact, one of the former Facebook executives said in an interview that “we have created tools that are ripping apart the social fabric of how society works”
The way social media is influencing our decision is extremely dangerous. It is like a rabbit hole. The moment you like the content, it would keep showing you the same content. Sometimes it is very frustrating. But many people don’t realize that their decisions are getting influenced by social media. For example, if you are a supporter of a particular political party then the social media will keep showing you the related videos, news and posts. This would make you even a firm believer of the political party. It would take you to an extent where you would not even listen to the other side of the story. It is well known that companies like Facebook play a big role in elections all over the world. Corporates and political parties are spending a lot of money on social media. Just to influence your decision.
Well, to be really honest. Social media is not completely bad. There are positive sides to it. You can find jobs, you can find products, you can promote your business, you can get your complaint resolved by posting it on the social media handle of the company, you can even find a partner. Social media is a great platform to showcase your talent. You can also follow good content which can make you more productive. For example, you can follow inspiration pages and channels so that you can get positivity in life. You can follow educational pages and channels where you can learn things like how to build your brand, how to manage money and live a financially comfortable life, etc. So think about it! How do you want to consume social media? Do you want to get influenced in a positive way or do you want to feel depressed and jealous? The choice is yours.
So in this article, we discussed the impact of social media in influencing your financial decisions. What do you think about the impact of social media in your life? Is it positive or negative? By the way, if you really want to learn every aspect of money management, then you can enroll in my video course. Many people have started enrolling and already reaping the benefits.