Don’t let social media ruin your financial life

Whether you’re a generation X, Y or Z’er, a millennial or baby boomer, chances are you have a social media presence.

Whether you are completely absorbed by it or not doesn’t change the fact that social media is now one of the most influential communication mediums on the planet, and can put even your finances at risk.

Randburg regional general manager at Momentum Leanda Schneider said, “The phrase ‘keeping up with the Joneses’ was first coined in 1913, but the idea that our social status is driven by emotions and the need to fit in has been around since the first caveman built the first wheel. Having said that, our digitally-inspired lifestyles have given birth to a new version of ‘keeping up with the Joneses’ – FOMO, or the fear of missing out.”

Schneider provided some insight into the pitfalls of online life that can influence the financial decisions we make, one way or another:

Beware the dangers of socially-driven online life

Schneider believes social media poses a bigger danger for personal financial choices than any other media before it. Where we used to just drool over celebrities in magazines and scoped out our neighbours over the wall, today, everyone’s life is in your newsfeed and your face.
“Your social media is filled with family, friends and acquaintances carefully crafting a highlight reel of their best life, while you are living the behind-the-scenes bloopers reel of your own life,” said Schneider.
She added that over the last 10 years or so, we also face the endless flurry of carefully crafted advertisements and influencer campaigns pushing their agenda and convincing you that you need X to be Y if you are going to live your best life.
“We have a never-ending stream of brands, content marketers and a million fraudsters in-between vying for our attention, our envy, our desperation, and our money. We, therefore, need to be careful how we conduct ourselves online and who we trust.”

Our emotions can control our finances

Schneider said the power of this persuasion makes a lot of sense considering a 2020 study performed by Momentum Investments that revealed that emotions, like fear and greed, can influence the decision-making of even the most astute investors. The researchers discovered what they dubbed ‘behaviour tax’ that revealed why following our gut instincts when investing often does not serve us well.

“The behaviours of investors and how this impacts their investments apply equally to personal financial decisions made in the home.
“Our financial behaviour is dictated by our emotions. When scrolling through social media, emotions like jealousy, desire, and envy can subtly or even overtly steer you towards making poor financial decisions and even incurring unnecessary debt.”
However, Schneider explained that if you can keep a clear head and stick to your financial plan, social media is neither good nor bad. “It’s all in how you use it to enhance your own life. This is where trust comes in.”

The right advice for success is out there

Schneider said we live in precarious times fraught with unpredictable challenges; nobody could have predicted the devastating and long-term economic impact of Covid-19.

“Your finances are now more under threat than ever, but you can find the right advice and partners for your success even on social media platforms.”
She said the trick is to find a reliable source of information, be it a brand or an expert that you can connect with on financial issues, and whose advice you can trust. Some brands share content online that will steer you in the right direction.
Everyone’s financial needs are different, and Schneider said connecting with an accredited financial adviser for advice on your journey to success is by far the best approach.

“If you have someone you can trust and that gives you sound financial advice to suit your unique needs, you will know who to listen to and who to ignore. Partnering with an actual human being, such as a financial adviser, is the best way to embark on a lifelong journey to financial success,” concluded Schneider.