When Sukhmani Virdi graduated from law school, she entered the job market with thousands of dollars in debt.
It was a relief to finally start working in my field and start paying my dues.
But when Virdi went to social media, she would see pictures of people traveling, and wonder where she got the time and money. Didn’t they go to school too? Weren’t they in debt like him?
“You are struck by the pangs of jealousy,” said Virdi. “Why can’t I have these things?”
The pressure mounted when Virdi started planning his wedding. She would look at pictures of other people’s weddings on Instagram and love things she hadn’t even thought of before. She was going over her budget.
“I started following my wedding vendors on Instagram, for example, and the algorithm starts showing you more wedding vendors and shows you more wedding photos and what other people are up to,” she said. said.
“I would actually remove my social media apps from my phone as a way of countering that feeling or instinct.”
It’s a feeling one might call financial “FOMO” or “fear of missing out.” This is why you keep scrolling Instagram, or the reason you bought five sets of loungewear at the start of the pandemic. It can also be the reason you are in debt, and this can lead to a vicious cycle that exacerbates mental health problems such as depression and anxiety.
Financial FOMO is when you spend because you feel the need to keep up with others or maintain a certain image, said Adam Fish, an advice-only financial planner at Stewart & Kate Financial Advisors.
Of course, some discretionary spending is part of life. So how do you know you’ve crossed the limit?
If your long-term goals are taking a back seat to discretionary spending, or you’re getting into debt for that expense, you’re probably living beyond your means, Fish said.
Natasha Knox, founder of Alafia Financial Wellness, said that people have a tendency to compare, which means they only compare themselves to those who believe they are doing better than them.
“It happens at all income levels,” she said.
And with increasingly sophisticated algorithms on social media, as well as sponsored posts and other forms of advertising, clicking “buy” has become a lot easier, Knox said.
“At times it is associated with boredom,” she said, as well as stress.
Hamilton-based psychotherapist Foluke Akinboyo said the way people portray their lives on social media can cause followers to view their own lives with a critical lens, leading to anxiety and even depression. That about your circumstances can also cause depression.
“Comparison is the thief of joy,” she said.
In an effort to fill the gap, you may start spending money, a little splurge here and there, which then escalates to guilt and anxiety over your financial circumstances, she said – a vicious cycle.
“The fear of missing out has an emotional toll,” Akinboyo said.
Jessica Moorhouse, financial educator and host of the More Money podcast, said that people often forget that social media is designed to be like a highlight reel of one’s life. But it’s easy to blame yourself for not living up to the positions of others, she said. “It’s a constant comparison game.”
Often, online advice from people who seem to be financially successful, it seems like budgeting or a side hustle or working really hard will get you the life you’re trying to build. But that advice often doesn’t mention things like generational wealth or luck, Moorhouse said.
For the younger generation, financial FOMO can be linked not only to small items, but also to larger purchases such as a car or home.
It can seem like people your age are buying homes while they’re struggling to make rent, or they’re buying cars while biking around town.
But often those people have a financial start, Fish said, such as help from their parents or a cushioned job.
It’s becoming harder and harder for the younger generation to afford things that were once considered essential, Fish said, and that puts a lot of pressure on people who can’t meet those milestones.
“That math doesn’t work,” he said, adding that you shouldn’t feel guilty for not doing something that’s out of your control.
And no, buying fewer lattes won’t fix your financial woes (well, it depends on how often you buy a latte).
If you find yourself attracted to something—a shirt, a vase or something big—that you didn’t want in your life before, Knox said you should try to plan the purchase before you buy. where would you wear it? Where would you put it? Is it fulfilling the need of your life?
If you can’t find a place in your life for this item, it’s probably not something you should be buying, she said.
Before you decide to buy something, you can also implement a 24-hour “cooling-off period,” advises Knox. This gives you time to think about it, check your bank account, and make more informed decisions.
Knox said it’s important that you don’t punish yourself for spending a little money on things that make you happy, and she avoids words like “trivial” that give a negative connotation to measured discretionary spending.
Everyone has different long-term goals, Moorhouse said, and it’s important to know what yours are, but also to think about what your short-term happiness is. You need to have a section or a special savings account in your budget for fun shopping so you don’t starve yourself for day-to-day pleasures.
Otherwise, “it’s like a crash diet,” she said. It won’t be sustainable, and you’ll feel guilty when you can’t follow your own rules.
Akinboyo recommends that you sit down with your finances and be honest with yourself about what you can and can’t do, even if it’s something you want to avoid.
“It takes a lot of intentionality and discipline,” she said.
Fisch said financial decisions compound for better and for worse. If you make a purchase you regret, remember that this is just a decision among many, and you have a chance to make up for it in the near future.
If you can’t stick to your budget, it could be a sign that you’ve set unrealistic goals for yourself, Moorhouse said. Track your spending for a few months, then use what you’ve learned to create a reasonable budget, and maybe even cut a few things.
Like a sustainable diet or fitness plan, there is no fast-tracking financial health, Moorhouse said.