(WTNH) — Facebook, Twitter and Instagram may have more control over your life than you think!
According to a new survey by Ally, 80% of centennials and 74% of millenials say social media plays a role in what they buy.
Financial Consultant John Caserta shares his advice on how to fight the influences.
How does social media impact our spending?
· Targeted advertisements.
Algorithms (or computer programs) are tracking your online activity. So it’s no coincidence that if you search for a product or service, you’re likely to see that product or service advertise. Even exchanging emails about a topic could prompt targeted advertisements.
· Peer pressure and FOMO.
· Endorsements by Influencers.
Companies often rely on celebrities, athletes, and other social media influencers to promote their products. And that translates into sales.
· Word-of-Mouth Advertising.
Companies also rely on online reviews because they know that consumers are more likely to purchase a product based on reviews, especially reviews from those in your network.
What can you do to minimize the impact of social media on your personal finances?
· Be mindful of targeted advertisements on social media. Make sure the purchase is really something you need and not an impulse purchase.
· Be careful with what you share. Make sure you posts avoid revealing personal information like your full name, address, or sensitive financial information.
· Forget “Keeping Up with the Joneses”. It’s common to see posts about new cars or vacations. Avoid trying to keep up appearances and focus on the things people don’t necessarily post about – like saving in your retirement plan or paying down debt.
· Create budgets for large purchases. And if you’re financing purchases, make sure there’s room in your budget for that new expense.
What can parents do to make sure their children don’t fall into that trap?
· Talk about the importance of saving money and the concept of “delayed rewards”.
· It’s ok to treat yourself but don’t overindulge.
· Lead by example.
· “Feed the Pig” – This was a marketing campaign by the American Institute of CPAs and the Ad Council that encourage people to fill their piggy banks. Use a piggy bank and make it a point to
· Save money in it for large purchases. Consider opening a savings account with your child and making it a habit to save into it.