March 19, 2018
We all have heard that phrase keeping up with the Joneses, but not many of us give much thought to how this phenomenon has changed in our era of ubiquitous technology and connection. As it turns out, the answer – specifically for Millennials – is a lot. A new survey from Allianz Life has found the tendency for social media users to broadcast a very curated view of their life has financial ripple effects for many Americans.
The survey found the fear of missing out drives many Americans to make poor financial decisions, and the most susceptible Americans are Millennials. The report states that social media “has become the millennials’ financial Achilles’ heel.” Of the Millennials survey respondents, 55% reported experiencing a fear of missing out, and 57% spent money they hadn’t planned to because of what they saw on their social media feeds. Nearly 9 in 10 (88%) said they believe social media causes people to compare their wealth/lifestyle with others. But it is not just the younger generation. Seven in ten (71%) of Gen Xers and just over half of Baby Boomers (54%) responded the same way. And 61% of Millennial respondents reported feeling inadequate about their own life and what they have because of social media, with half of Millennials claiming to have spent more money going out than they do on rent or mortgage.
You know, Tom, the funny thing is Millennials do not really deserve this reputation. Witnessing their parents deal with financial hardship during the Great Recession had a profound impact on this generation, and they have taken lessons from those experiences to improve their own financial habits. In fact, the survey found that 77% feel financially confident (compared to only 64% of Gen Xers) and 48% of those with a 401(k) contribute 10% or more on a monthly basis - the highest percentage of any generation. On top of this, 41% of Millennials reported they set aside a portion of their monthly earnings for savings, and 58% believe saving for retirement is a basic necessity. Finally, they are very likely to seek out help. Forty percent of Millennials said they have a financial professional and work closely with them, compared to just 25% of Gen Xers.
All of us need to be aware of the pressures that we are exposed to when on social media. I think we are often very aware of the barrage of ads we see on various platforms, but we do not necessarily think about what we see from those we are connecting with. If you are a Millennial, I urge you to embrace the stock market. The survey found that nearly 6 in 10 Millennials remain skeptical of the stock market.
If you are a Gen Xer or a Baby Boomer, this survey tells you there are a number of places to step up your game. Whether it is setting aside money for savings, or contributing more to your retirement, if you are in these generations you must take these lessons to heart.
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