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Social media has become an integral part of our everyday lives. We spend hours each day scrolling through our smartphones, often on platforms like Facebook, Twitter, and Instagram. While it may seem harmless, have you stopped to consider how social media can have an impact on your spending habits?

Social Media and Your Financial Wellness

Using social media regularly can impact your financial wellness in two main ways. First and foremost, it can drive spending and reduce savings due to a culture of consumption and comparison.

Whether you're liking Bali pictures on Instagram or reading about your friend's latest purchases on Facebook, social media often creates an illusion that others may be better off, creating unrealistic comparisons. Seeing a friend or coworker's posts about weekly brunches or European vacations isn't harmless. Instead, it can actually spark jealousy and wanderlust, pushing us to spend more and save less. After all, our financial decisions are heavily influenced by our peers and what we consider "normal." Social media often creates the notion that constant spending is both desirable and normal.

In fact, over half of millennials say that they've made impulsive purchases based on the content they saw on their social media feeds. And 82 percent of social media users say they share their latest purchases with their friends. However, it's important to remember that social media offers a curated, rosy picture of a person's life, rather than a realistic one. Armed with filters and cute captions, influencers aim to present you with an idealized view of how much time they spend at beaches, bookstores, and brunches.

But your friend's photo of their latest designer haul isn't the only challenge when it comes to financial wellness. Social media platforms use targeted ads — based on demographics like your age, gender, and location — to market products directly to you. Every time you swipe and scroll, you're giving the platform crucial information that will help them determine what they should advertise to you. And because we're spending so many more hours on social media platforms than ever before, they can even alter the way we think about ourselves.

To want more, you first have to think you don't have enough, or even that you aren't good enough yourself. Marketing strategies often rely on building up insecurities, implanting self-doubts, and creating problems — problems that, many ads claim, only their products can solve. But fear-based purchases won't make you happy; they'll only lead to more fear, as you'll start to want "more, more, more." This mindset can affect your savings, as you could become more focused on displaying visible signs of wealth rather than building your financial stability behind closed doors. Your savings account is far more important than showing off what you do or don't have.

In addition to increasing your spending and decreasing your likelihood of saving across time, social media can impact your earning potential. Although it can sometimes be invaluable for networking purposes, it can also serve as a major distraction. Many employees admit to checking personal social media throughout the day. Others feel like they can't get away from their phones even while working on important projects that require laser-sharp focus.

And particularly in the gig economy, when we're expected to always be "on," social media can prevent us from recharging our batteries in stillness and quiet. If you allow social media to creep into your relaxation time too often, it can negatively affect your ability to get things done, dull your creative edge, and dim your focus. This level of distraction can cause your anxiety levels to skyrocket and your work performance to suffer.

Avoiding the Negative Financial Impact of Social Media

Protecting your financial wellness can sometimes be as simple as putting your phone down. Just seeing an ad for a product can make you subconsciously more interested in buying it, even if you didn't think so at the time. You can also cut down on the number of accounts you follow, set a time limit on your daily social media use, and carve out times of your day (like just after you wake up) to "go dark" and ignore the internet entirely.

This process also might take a wholesale shift and some real consideration about your long-term personal and financial goals. Many users say they use social media to make decisions about everything from travel to style and career. Don't be afraid to break the mold and go your own way.

If you're not keen on giving up social media for good, there are ways to use it that won't put a dent in your bank account. Financial wellness, like healthy social media use, is all about putting you in the driver's seat. You can choose to curate your social media feed so that it's packed with content about fitness, inspiration, and friendship, rather than consumption and the "more, more, more" mindset. Building up your self-confidence will make you less susceptible to doubt-promoting marketing tactics. Without unhealthy comparisons and jealousy-based spending, you'll have more freedom to select your purchases wisely.

This information and recommendations contained herein is compiled from sources deemed reliable, but is not represented to be accurate or complete. In providing this information, neither KeyBank nor its affiliates are acting as your agent or is offering any tax, accounting, or legal advice.

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