5 Ways Social Media Influences Your Spending Habits And What To Do, As Per Financial Therapist

Social Media's Influence On Your Spending Habits

In a 2024 study, researchers stated that the Internet and Mobile Association of India (IAMAI) projects by 2025, a stunning 900 million people might use the Internet in India. And this means online shopping will be at an all-time high where women will be capturing a significant percentage. The study added that "key elements affecting women's online buying behaviour in India, include psychological motivators, social influences, cultural norms, economic considerations, and privacy/security concerns."

Mr. Khot agrees that social media indeed plays on a woman's psychology to influence her into buying stuff and this only spikes during the festive and wedding seasons. "Women, often the primary decision-makers for household purchases, are particularly targeted by these (social media) platforms, making them more vulnerable to the spending trap," he says.

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5 Ways Social Media May Influence Your Spending Habits

"Social media goes beyond showing you what’s trending and this is what exactly leads to shopping sprees," adds Mr. Khot. He lists five ways in which social media influences you to spend more than planned:

1) Advertisement Campaigns

All advertisement campaigns are designed to appeal to your emotions, forcing women to spend more than intended. These days, social media platforms like Instagram, Facebook, and YouTube are full of promotional content and designs that hit you emotionally and influence your financial decisions.

2) The Influencer Loop

Influencers always showcase aspirational content with glamorous outfits, trending jewelry, and festival decor. Social validation such as comments, likes and testimonials works on our psyche. This "approval" creates picture-perfect lifestyles, which build a strong temptation to copy, leading to excessive spending.

3) Discounts and Offers

Social media always gives limited-time discounts/offers that lead to FOMO (fear of missing out) compelling one to buy immediately.

4) Tailored Ads

Once you like or see any specific product, social media algorithms track your browsing behaviour and tailor ads to match your preferences. This triggers your emotional viewpoint making purchases feel irresistible.

5) Different Schemes

With UPI, credit cards, and buy-now-pay-later schemes, many women lose track of their spending. This leads to getting stuck in a loop and may lead to financial stress and debt accumulation.

5 Steps to Take To Prevent Overspending

Mr. Khot suggests a mindful approach before social media lures you into overspending. The following 5 simple steps will help further:

1. Set clear priorities for your wants and needs.
2. Define an appropriate budget so that you can track your expenses and avoid overspending.
3. Think twice before you make a final decision.
4. Stay away from social pressure or mute ads that influence.
5. Focus on meaningful choice.

"Enjoy this festive and wedding seasons without compromising your financial health. Social media is a powerful tool for inspiration. But make sure it does not dictate your spending habits," Mr. Khot wraps up.

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