Financial Fiddler

If you scrolled through social media today, you probably already saw pictures from the cool vacation your friends are taking or that awesome new device that everyone has.  You picture yourself on that vacation or having that latest gadget. FOMO, also known as “Fear of Missing Out,” is that feeling of anxiety from not being part of an event that is happening or being up on the latest trends.  It is so dangerous to your own personal finances because always trying to fit in will cause you to buy and do things that you either cannot afford or do not need.   

In a recent study done by Credit Karma, 48% of millennials are going into debt to keep up with their friends and acquaintances.  According to the study, millennials fear missing out on a once-in-a-lifetime experience, not feeling included in future activities, feeling like an outsider, being judged and losing friends.  In today’s society, it is not only the millennial generation that is affected by FOMO. Other generations also experience this feeling. Here are some ways to overcome FOMO:

1. Have self-awareness of FOMO

One of the first steps to overcoming FOMO starts with being able to identify it when it is happening.  Do you ever find yourself feeling anxious if you do not know what your friends are doing if they haven’t posted a status update on social media recently? Or maybe you feel they are having rewarding experiences without you. Whatever the case may be, these are signs of FOMO. Taking a moment when you have identified that feeling and putting a stop to it is important.  Understand that it is OK to feel FOMO, but not to allow it to consume your life.        

2. Resist “Limited” or “One-Time” Offers

Have you ever gotten an email or a pop-up ad for a “One-Time” or “Limited-Time” offer?  Many companies have studied FOMO and understand the power it has on the average person. If they give you a quick deadline, it forces you to have to make an impulsive decision.  For the most part, you can probably live without the products they are selling or promoting, even if it sounds so enticing. Before you click “yes” to any offer, step back from the situation and truly ask yourself if this is necessary.  If it is not, then walk away and know that you saved a lot more than you would have if you purchased that product.  

3. Create a budget

Budgeting is a very important tool that everyone should be utilizing in order to manage their finances.  When you budget, you are able to easily track your income and expenses. After expenses are paid, you are able to figure out what is leftover for “fun.”  By sticking to a budget, you may not eliminate FOMO altogether, but you will have better control over your finances and what you can afford to spend if an event or purchase comes up.

4. Suggest different ways to save money

We have all seen this same type of scenario play out, regardless of your age.  Your friends or social group want to get together and go out this weekend. The plan is to meet up at an expensive restaurant, go out afterwards and see where the night takes you.  The bottom line is you will probably be spending a decent amount of money. You know that you have a lot of expenses this month, however, you do not want to miss out on a great time.  If you are having money issues, chances are others in your group are, as well. Here are some alternative ideas that you could propose:

• Have a movie night.  Watching a movie at the theater is becoming more and more expensive.  If you add refreshments into the mix, before you know it, you are easily spending $25+ per person.  Instead of going to the theater, consider having a movie night at someone’s house. They could even provide refreshments and it will be ten times cheaper than going to the theater.

• Volunteer as a group.  There are so many opportunities to volunteer in your communities, no matter where you live.  It could be spending time at your local food bank, serving at a soup kitchen, or helping out with Habitat for Humanity.  Not only are you doing this as a group, but you are also giving back to your community at the same time.

• Start a fantasy sports league.  Did you know that nowadays there are fantasy leagues for almost any sport you can think of, not only football, baseball, and basketball? You do not need to be a sports expert in order to play.  You and your friends can play for free together through platforms like ESPN or Yahoo. And best of all, you can stay connected without having to worry about spending money.

5. Delay instant gratification

We all have that friend who is first in line for every new product, phone, electronic or other “new” gadget out there.  They may not need it, but they have to be the first one in the group to have it. Of course, they show you the shiny new device or you see it on social media and you think that you have to have it, regardless of the cost.  This could also happen with other things you see in your daily routine that you think you absolutely have to buy.

One of the best things you can do to overcome FOMO is to delay instant gratification and think about what you want to purchase for a period of 24-48 hours.  This will give you time to weigh the pros and cons of purchasing this item. Will you use it three or five years from now? You can ask yourself numerous questions, and probably the majority of the time, you will figure out that you are better off without that product.        

6. Limit your social media

How many times have you been on Facebook, Instagram, Twitter or any other social media site today?  Many of us will go through our feed, get caught up, then do it again the next hour.  We are fixated on everyone else’s life. However, what we typically see are the highlights of someone’s day or week and the fun things that they are doing.  This causes many to begin comparing their own lives to what they see on social media.

This can be dangerous financially because what you see on social media can cause FOMO on an even bigger scale.  You see your friends and acquaintances with new cars, exotic vacations, new houses and other things. It can cause you to compare your own life to theirs, even if you are in a completely different financial place than them.  

By beginning to limit your social media, you can get a grasp on your FOMO.  When you start feeling FOMO from things you see on social media, remind yourself that you do not have to match the same experiences that you are seeing.  Stick to your financial goals and understand that the world around you will still continue to move. Your friends will take vacations, have meetups and buy new things, but that does not mean you absolutely need to as well.

Summary

The fear of missing out is definitely a powerful feeling that many experience on a daily basis.   Learning to control FOMO is extremely important in order to limit your impulse purchases and overall financial situation.  Your financial goals and dreams look different than your friends’, family’s or co-workers’ dreams. FOMO is a deep financial fear that you can overcome.