Keeping up with the Joneses in 2021 is next to impossible as the internet has made us all neighbors, and it is straining our finances.
More than a third of Americans admit that social media has influenced their spending habits, according to a Mint poll last year, even though 64% wonder how their friends can afford all the glamorous trips and cars they publish online.
Obviously, competing with an entire social group will quickly burn your money. But Brent Weiss, co-founder of financial advisory firm Facet Wealth, says the real mistake is trusting what you see online in the first place.
Here’s why removing your feed could revive your bank balance.
Look through a filter
Weiss says it’s easy to forget that Facebook and Instagram never tell the whole story.
âIf we jump on social media, there’s this different life that’s not the reality presented to usâ¦ Everyone has a $ 50,000 wedding; everyone buys a big house, âsays Weiss.
âBut the reality is a lot of people are making very smart and informed decisions. That’s not to say they don’t have great marriages, but they balance that out with the rest of their lives.
People don’t post online about their smart investing habits or when they invest more money in an emergency fund. And they certainly don’t publish the amount of debt they incur.
A distorted picture of your friends’ finances can be especially dangerous when you’re about to make an important and emotional decision, like buying your first home.
âWe tend to make really bad decisions as humans. It doesn’t make us bad people – we just make bad decisions, the bigger the decision, âWeiss explains. âIf you’re going through a high level of emotion or stress, it’s actually proven that we’ll make worse decisions. “
What’s the antidote?
Weiss says the real problem with people isn’t bad planning – it’s not having a plan at all.
âOne of the biggest mistakes we all make is not setting proper goals for ourselves,â says Weiss. “And I say all of us because even though I’m a financial planner, I always make mistakes.”
So what does a real goal look like? The Certified Financial Planner says to ask yourself three questions: what is it, how much does it cost and when do I need it?
âThen you can sit down and say, ‘This is how much we would need to save for the ideal situation,’ and then you can see how that impacts the rest of your life,â Weiss explains.
âPart of my job is showing you all of your options and helping you understand the trade-offs that might be necessary along the way to help you achieve your goals. “
As for social media, Weiss advocates an âanti-socialâ policy when it comes to any financial decision. Turn off your phone, stop thinking about what other people are doing, and focus on your own values ââand goals.
Emotions are inevitable when planning a wedding or buying a home, but falling back on the plan you created with your financial advisor – or just having a plan – can help cut through the fog.
How to speed up your savings
If you have a number of short to medium term goals that you need a little budget boost for, you have a few options for generating extra income right now:
Lower your insurance premiums. When was the last time you looked for a better price for your auto insurance? If it’s been a long time, it can cost you over $ 1,000 more each year. Shop around to make sure you really get the best rate possible, then do the same to save hundreds on health insurance.
Save like a pro. Even if you’re putting yourself on a meager budget, you’ll still need to stock up on supplies every now and then. And when that time comes, use a free browser extension that will scour the internet for lower prices and coupons so you never pay too much again.
Take a side project. Do you have a special talent, such as writing, drawing or dubbing? Remote and live work is here to stay, so starting a profitable side business and finding buyers for your skills has never been easier.