Social media is making you poor

The dual assault of targeted advertising and influencer culture is eating away at our financial health.

After I cut Instagram last summer, I experienced an unexpected side effect — I started saving money. Like, a lot of money.

I had considered leaving social media for years before I finally pulled the trigger. I hated wasting time scrolling, it made me sad, and I knew I was using it as an unhealthy coping mechanism.

I could admit to myself that I had a social media problem. I did not, however, think I had a shopping problem.

But maybe I did. Without the dual-assault of influencers shilling and targeted advertising, I wasn’t buying every “must-have,” every “essential,” every “life-changing” product. I was saving hundreds of dollars a month, and I didn’t even feel like I was missing out on anything.

In fact, when I was active on social media, I often felt that I was missing out on buying things I thought I “needed”. I coveted fashion or home pieces, and sometimes (often), I’d splurge even when I shouldn’t have.

Seeing the extra money in my bank account got me wondering about how much social media has shifted and grown the way we buy and consume goods, and ultimately, it got me curious how often it leads to debt.

Targeted advertising

Targeting advertising is nothing new. I can still remember learning about a case when I was at university, well-over a decade ago — a young woman didn’t know she was pregnant, but based on her purchasing behavior, she received coupons for cribs and baby clothes from Target in the mail. Target accurately predicted her pregnancy (if you’re curious, more about the case study here).

Now, it seems like you can simply think “I need new tennis shoes,” and within hours, your entire feed is filled with tennis shoe ads.

As targeted ads have become increasingly sophisticated, they’ve continued to take advantage of consumers. From Reverbico:

Tailored promotions leverage psychological principles to influence consumer behavior. Here are a few crucial psychological strategies employed:

1. Scarcity: Ads often create a sense of scarcity by highlighting limited-time offers or limited stock, prompting consumers to act quickly.

2. Social proof: Featuring reviews, testimonials, or user-generated content in advertisements can build trust and encourage purchases by showing that others have benefited from the product.

3. Personalization: Personalization makes consumers feel valued and understood, increasing the likelihood of making a purchase. Ads that address consumers by name or reference their past behavior can be particularly effective.

4. Emotional appeal: Ads that evoke emotions, whether happiness, nostalgia, or fear of missing out (FOMO), can drive consumers to make purchases.

5. Authority: Utilizing endorsements from experts or influencers in advertisements can increase credibility and persuade consumers to make purchases. Many companies put a lot of effort also into learning how to use influencer marketing to increase brand awareness and put the knowledge they’ve gained into practice.

Our social media feeds are uniquely targeted to directly influence us into making purchases — all based on the data that we willfully give up to these advertisers.

The slow drip of sketchy tech practices

I’ll admit, there have been times that I’ve felt there’s some convenience in targeted marketing. Oftentimes, a simple Google search doesn’t really help you find what you’re looking to buy, and then, it seems, suddenly your social media feed is handing you exactly the right thing.

Yet, ultimately at its best, it’s annoying and pervasive; at its worst, it’s deceptive and predatory. Maybe I simply was curious about a certain brand, but now I can’t escape them (or their competitors). Soon, I start to think, “wow this brand is everywhere, maybe this is something I need or a product that I can trust.” Before I know it, I’ve bought a new face cream that I never needed in the first place.

At least, with targeted advertising, you logically know — this is an ad in my feed. The lines get blurry when it comes to the people you’re choosing to follow.

Influencer culture

Influencers didn’t exist 15 years ago, yet their strength in driving sales has become unparalleled. According to a recent study, 74% of consumers have bought a product because an influencer recommended it. Further, 68% of consumers chose to visit a specific location, like a theme park or travel destination, because they saw it recommended on social media.

We love a good recommendation, and the more ingrained we feel in influencers lives, the more likely we are to want to emulate them, or at the very least, we trust that what they’re buying is quality.

I find influencer culture complex for a lot of reasons. On one hand, I’m glad that there is this entire industry that was created by and mostly made up of women. It’s really incredible, and I do value some things I’ve learned or purchased thanks in part to influencers. I really respect that it’s a career for these women (and men), and I know they put a lot of work into building their following, creating engaging content, and balancing their personal lives with the expectations from their communities.

However, I struggle with some aspects of the culture. Spending so much time watching other people’s highlight reels breeds feelings of insecurity and inferiority. It’s natural (though not healthy) to experience FOMO, to try to emulate influencer’s lives by doing and buying what they do and buy.

Aren’t we friends?

Even if the influencer has good intentions (which I’d warrant 99% of them do), it’s still their job to influence you to buy more things. They benefit by portraying an aspirational, yet seemingly attainable life.

It’s not dissimilar than my 4 year old who has been asking for more new presents since Christmas — we see influencers who constantly have new clothes, new shoes, new vacations, new house decor, hell new houses, and of course, we want it too. It’s contagious. Maybe we can’t afford the designer brand, but look, they shared a dupe! Maybe we can’t make it to Hawaii, but we’ll stretch our budgets and schedule a vacation that we can share on our own highlight reels.

At this rate, nothing can ever feel like enough. It’s no wonder that Gen Z believes that an annual salary of nearly $600k and a net worth of $9.5 million are necessary to achieve “financial success.”

So what’s the harm?

Consumerism is good for the economy right? Sure, but only if we have the money to spend. With record inflation, everything is more expensive, yet we continue to buy more more more. Some users can thank Buy Now, Pay Later (BNPL) programs that bridge the gap between what they want and can afford. These programs are short-term, interest free credit options, and evidence indicates their use is increasingly popular among financially vulnerable consumers.

According to GQ, Gen Z is making less than millennials made a decade ago at the same age: “As of the fourth quarter of 2023, Gen Zs aged 22 to 24 were making an average of $45,493. At that same age 10 years ago, adjusted for inflation, millennials were making $51,825, according to a recent study by TransUnion. And the debt-to-income ratio is 4 percentage points higher for Gen Z than millennials, coming in at 16.05% compared with 11.76%, the credit bureau found.”

We are going to reach a breaking point, or maybe we have already. I’m not an economist, but I am certain we did not spend so frivolously before social media. Can we call it an economy booster if we’re burying ourselves to get there?

You need more depth, not more stuff

I can’t tell you how many random house gadgets, parenting guides, and “must have” fashion pieces that I ordered before leaving social media.

I bought two separate devices to chop fruit that I never use. I wasted money on skin care routines that did nothing to change my skin. I was sold on cookware that barely lasted six months. I have so many bath salts, bath bombs, bath candles, and bath scrubs sitting in my closet. Dear reader, I do not even like to take baths.

Despite how many things were pitched to me as “life changing,” the only things that have truly changed my life are my family, my friends, and the experiences I’ve had. Okay, I won’t be a total bore — I do not regret any books that I was influenced to buy. Books, too, have the capacity to be life-changing.

I do challenge you, though, to observe your spending. Think about what you’re buying. Is it because the internet told you to buy it? Or is it something you truly desire? Are you buying things to fill a void or to emulate a life you want? Or can you build the life you desire without the extra stuff?

I promise you, nothing that you buy from a little box on your screen will truly be “life-changing” — not in the way you hope at least.