No surprise, but millenials have trouble saving money.
A major culprit? FOMO, apparently.
There’s now proof to back it up. In fact, 39% of millennials spent money they didn’t have, and went into debt to keep up with their peers, according to a recent survey on millennials and social spending. To boot, 27% feel uncomfortable saying “no” if a friend suggests an activity they can’t afford. Of those who admitted going into debt from FOMO, a whopping 73% kept it a secret.
As you can see, social pressure is taking a huge financial toll. Let’s dig a bit deeper, and look at some reasons why millennials are experiencing FOMO:
All Those “Perfect Life” Selfies on Instagram
It’s no small wonder why YOLO and FOMO are inciting bouts of overspending. These days the Joneses aren’t just the next door neighbors with the shiny new toy. You’re probably watching that Instagram influencer with the perfect life that you feel pressured to keep up with.
Photo documentation of dreamy, all-out Sunday brunches, designer fashions, and digs so amazing they’re worthy of a mention in Dwell. You’ll no doubt feel mounting pressure to spend just so you’re not left out.
Weekend getaways, replete with wine tastings and spa dates, brunches at the newest hipster spot in town, or super pricey music festivals like Coachella are enough to make you want to drop big bucks. You don’t want to feel left out on these exciting social affairs. Next thing you know, you’ll be reaching for your credit card. No bueno.
Plus, after spying on your friends via the gram (see above), Venmo transactions (okay, maybe that’s just me) and group chats on the “next epic outing,” you’ll feel the incessant urge to want to keep up.
Millennials spend nearly half of their money eating out. And while spending more on eating out than on groceries seems to be the overall trend in the U.S., it’s the food outings that can really burn a hole in your pocket. With the swell of food delivery apps and meal delivery services, there are even more ways to blow your budget on food.
So how can you fight FOMO? One of my favorite sayings is “Live like no one else so you can live like no one else.” In other words, if you’re going to win at the YOLO/FOMO game, you’ll need to swim upstream.
Here are some ways you can keep those ugly feelings of missing out to a minimum and live within your means.
Suggest Cheaper Alternatives
If you don’t want to full-out decline a social invite, offer up some alternatives, like hosting a potluck. Or instead of that pricey concert, suggest checking out a less-expensive show or movie. My friends and I enjoy hiking, biking, and occasionally pick a brunch spot everyone can afford. You don’t have to be a hermit with zero social life to stick to a budget. You just have to tap into your resourceful, creative self and offer different options.
Be the One to Talk About Money
Be brave, and talk about your debt situation. It can be a very casual, “Hey, I’m just letting you know I’m working on paying off my (insert type of debt here), or maybe “Ooo, that X is a little more than I can afford.” Having a budget you need to stick or, or simply not wanting to spend your money on that outing is nothing to be ashamed about.
There’s nothing wrong with saying you can’t afford to do something. Frugal shaming is just as terrible as debt shaming. In turn, being the one to start a convo about money could lead to your friends throwing you a sympathy bone. Plus, but it may inspire a few friends to open up as well.
Create an “Outings” Account
As you can imagine, it’s not the fixed expenses – rent, utilities, streaming subscriptions – that can eat into your budget. It’s your discretionary spending, or expenses that change each month. We’re talking about eating out, concerts, movies, and filling up your gas tank.
Instead of lumping all my spending into one account, I designate a certain amount to what I call an “outings” account, which is money budgeted purely for social outings. I also earmark a certain amount to an account for necessities like transportation, household items, and groceries.
Why’s the reasoning behind this method? Well, it’s far easier to control how much I spend on groceries than going out to dinner with friends and family. By having a separate amount for social spending, I can also keep better track of how much is going out each month. If FOMO is getting the best of my budget, I can then curb my spending before it gets out of hand.
Pay Yourself First
If you’re concerned you may spend too much due to FOMO, consider setting up an auto transfer to save a portion of each paycheck. If you’re a Chime member, you can take advantage of Chime’s Automatic Savings feature, allowing you to effortlessly save 10% of each paycheck. Chime also helps you save by rounding up each purchase you make on your debit card and depositing it into your Savings Account. Cha-ching!
If not kept in check, FOMO can have serious financial repercussions. Yet, if you’re mindful of your spending and resist the urge to cave in to social pressure, you can set yourself up for financial success and actually save more money. Are you ready to get started?