Rent, credit card bills and student loans call can make it more difficult to save money, especially for younger people. Now, according to a new study, you can add social media to that list, too. Thanks to a new survey from Propeller Research on behalf of Varo Money found that social media makes millennials spend more money. The survey’s results revealed that 47 percent of millennials spend up to four hours a day scrolling through social media, and that leads to 38 percent of scrollers purchasing something after seeing it on their social media feeds.
According to the study’s results, 41 percent of participants said that FOMO (fear of missing out) played a huge factor in their social shopping habits online, and admitted that they had purchased something via social media to feel better about their own lives or to make them happier.
According to Dr. Susan Weinschenk who was writing for Psychology Today, social shopping is so satisfying to individuals because the anticipation of waiting for an online order to arrive actually activates dopamine in your brain. “When you place an order for a product online, you don’t get the product right away. You have to wait. And in the waiting is anticipation,” she explained. Furthermore, a short report from RazorFish confirmed her claims when they revealed that up to 82 percent of online shoppers said they were more excited about waiting for an online order to arrive than they were when they shopped in-store for their items.
According to yet another study published in the Journal of Consumer, recent research has discovered that heavy social media users, particularly students have less self-control than those who spend less time using social media. Additionally, those individuals who can’t slow down on social media time on their devices are more likely to engage in other habit-forming behaviours, have lower credit scores, and more credit card debt than those people who don’t use social media as much, or at all.
“The heavy downside is that social media purchases can be impulse purchases,” financial planner Abel Soares said in a statement to Varo. With many online retailers accepting Apple Pay, Venmo, or PayPal, one-tap shopping is often faster than ever before and is now easily one of the reasons you might be more likely to impulsively purchase something on social media.
The research also discovered that those who were forced into actually having to type their credit card number into the phone or computer and/or create an account prior to purchasing were more likely to abandon their online cart of goodies.
If you want try and stop your unnecessary social media spending habits, Varo has recommended that you make it more difficult for yourself to complete purchases. “Just as digital brands have made it easier than ever to purchase something, you can make it really hard for yourself to do it — delete your connected credit card so that every time you want to make a purchase you have to find your credit card.” You can also log in to your bank online and see where you’re spending the most money and just how many transactions you’re going through week by week.
Millennials are making strides in the right direction and “are positioning themselves to be in good financial shape,” the study notes. Almost 80 percent feel “financially confident,” 58 percent believe saving for retirement is a basic necessity and 41 percent set aside money each month for saving. And overall, they’re better with money than their older peers.
So, even with the temptation to spend based on social media, “millennials are finding innovative ways to build their financial strength,” Kelash says, “and are becoming more confident because of these actions.”