By: Catey Hill – marketwatch.com – May 13, 2019
You’re not going to like this.
Millennials spend more time on social media than older generations: People ages 25-34 spend 141 minutes per day on it, versus 105 for the 35-44 set. And that could be hurting both their finances and mental health.
Indeed, nearly half of millennials (49%) say that their spending habits have been influenced by the photos and experiences their friends share on social media, compared with only about one-third of Americans in general, according to a data survey of more than 1,000 Americans by financial firm Charles Schwab.
“Social media has become the millennials’ financial Achilles Heel.”
Other surveys have uncovered similar trends: Roughly two in three millennials think that social media has a negative impact on their financial well-being, according to a 2018 survey of more than 2,000 millennials from financial firm Fidelity. Data released in 2018 by mobile bank firm Varo Money found that 53% of millennials admit to buying something they saw advertised on social media. And a 2018 survey from Allianz Life shows that more than half of millennials (57%, versus just 28% of Gen Xers and 7% of boomers) say they’ve spent money they hadn’t planned to because of something they saw on social media.
This is partly because millennials say they feel pressure to keep up with their friends’ spending — and of those, nearly half say that social media posts of friends’ vacations and lifestyles contribute to that pressure, according to 2017 data from TD Ameritrade. Social media also makes 61% of millennials (versus just 35% of Gen Xers and 12% of boomers) feel inadequate about their own life and what they have, with 88% comparing themselves to others on social media (compared to just 71% of Gen Xers and 54% of boomers who say the same), according to the Allianz data. And the Varo data found that three-quarters of millennials feel social media portrays an unrealistically positive view of people’s lives — and as a result 41% have made a purchase to feel better about their own lives.
“Social media has become the millennials’ financial Achilles Heel,” the Allianz survey, which questioned more than 3,000 adults ages 20-70, concluded. Adds Paul Kelash, vice president of Consumer Insights for Allianz Life: “More than any other generation, social media and the allure to spend beyond their means could have long-term negative effects on [millennials’] finances if they’re not careful.”
This likely exacerbates the already tough financial spot many millenials are in: “Millennials (ages 18 to 34) are more likely than other generations to have nothing saved,” according to a 2017 survey from GoBankingRates.com — with nearly half of young millennials (18-24) having $0 in savings. And most haven’t saved appropriately for retirement either.
Not only can social media wreak havoc on our finances, it can also hurt our mental health. Younger adults who use social media a lot are at a higher risk of depression, and people who use many different social media sites are at higher risk for anxiety and depression. What’s more, the more time people spend on social media, the more likely it is they feel socially isolated — with people who spend more than two hours swiping through social media sites nearly doubling their risk of feeling socially isolated.
Of course, social media can have plenty of positive impacts on our lives too, helping us stay connected to friends we might otherwise lose touch with and learn new things. Plus, some use it to keep themselves financially accountable, boasting about how much money they’ve saved, for example.