More pressure to keep up with the Joneses now thanks to social media.
Each week, Consolidated Credit searches for financial research that can help you deal with your debt and budget. This week…
The interesting study
The material need to keep up with the Joneses is nothing new, but the American Institute of CPAs recently conducted a survey to see how much worse social media has made the drive to outdo your neighbors.
The big result
One in four adults (25% of survey respondents) has been left feeling envious after seeing someone else’s post about a vacation or a new purchase. What’s more, 11% acted upon that envy to take a similar vacation or buy a similar item.
The fascinating details
One of the more interesting details revealed in the survey is people’s connectivity to social media, or rather lack thereof. Of the more than 1,000 adults polled…
- Only two thirds (67%) have social media accounts
- And less than half (48%) check their most frequently used account more than once a day
So this belief that everyone is connected all the time now may not be as far-reaching as people who are connected 24/7 believe.
Still, it’s the drive of those who do connect that’s most concerning:
- 21% admit they’re more likely to make a purchase or choose an activity based on how friends and family will view it once it’s posted
- 14% of people have posted something specifically because it looked fancy or expensive
And it’s not all that surprising that social Jonesing is more prevalent when it comes to younger generations that older:
- Millennials are twice as likely as Boomers to report that social media influenced a purchasing decision (26% vs 12%)
- They’re also twice as likely to feel envy over other people’s posts (31% of Millennials vs. 15% of Boomers)
What you can do
Triggers for keeping up with the Joneses are nothing new, but social media definitely makes it harder to keep up. Whereas you used to only have to worry about the new boat your neighbor bought sitting in the driveway or the vacation pictures your brother brought to Sunday dinner, now there’s a much bigger pool of Joneses to compete against and you’re inundated almost constantly if you log on to your accounts daily.
“No matter where they hit you up, the Joneses are usually bad for your budget,” says April Lewis-Parks, Financial Education Director of Consolidated Credit, “and you never want to base your purchasing decisions on someone else’s potentially bad choices. After all, there’s every chance the Joneses took on unmanageable amounts of credit card debt to pay for that vacation they posted. So you’re following them into debt if you follow up their trip with one of your own.”
Consolidated Credit encourages people to ask the following three questions when it comes to deciding on a luxury purchase:
- Can you pay for that expense with cash or money you have saved?
- If not, if you plan to put the purchase on credit do you have a plan to pay off the debt within the first few billing cycles?
- If there’s not a more affordable version and you really want to opt for the luxury brand or vacation plan, can you wait to generate savings to pay for it?
“Your goal should be to avoid taking on credit card debt that you don’t have a definitive plan on how to pay it back,” Lewis-Parks explains. “Ideally, paying off a luxury purchase in one billing cycle minimizes finance charges. If it will take 2-3 billing cycles for a major item or series of vacation reservations, then the transaction should go on your credit card with the lowest interest rate and you should be able to craft a repayment plan that eliminates the debt in-full within a few months.”
For more information on how to manage credit card debt strategically, visit Consolidated Credit’s No-Hassle Credit Card Debt Elimination Guide. If you’re already in debt and need help to craft a strategy to get out of debt quickly, call Consolidated Credit today at 1-888-294-3130 or complete an online application to request a confidential debt and budget evaluation from a certified credit counselor at no charge.