Fight back against debt by FOMO
'Fear of missing out' can cause overspending
Whether it’s an all-too-easy-to-splurge-on getaway with friends to Las Vegas, a longtime habit of spending big to attend every concert by a favorite singer, or just trying to keep up with the Joneses, FOMO can easily drive you into debt.
Fear of Missing Out – FOMO – was added to the Oxford English Dictionary in 2013. The anxiety caused by missing an exciting or interesting event happening elsewhere is nothing new. Social media, though, tends to intensify our suspicions that others are enjoying an amazing life without us.
According to a 2013 study published by Andrew Przybylski, an experimental psychologist with the Oxford Internet Institute, FOMO is prevalent across all demographics, but most significantly impacts younger men. FOMO can lead to lower levels of satisfaction, envy and general discontentment with life. Responding to this notion of missing out can lead to overspending or use of debt to keep up.
You have to have [your goal] written down somewhere and remind yourself daily.
Financial planner and blogger
In a 2015 study by Canadian public relations firm Citizen Relations, 64 percent of adults surveyed said they felt pressured by FOMO. The largest group affected, adults ages 18 to 30, say travel is their largest FOMO-related spending category, and that’s largely driven by posts they see on social media networks.
In our need to stay connected, we’re constantly inundated with the highlights of our friend’s lives through Facebook, Twitter and Snapchat. The average adult has 338 friends on Facebook, and 64 percent of Facebook users check their news feeds every day. This daily – or hourly – drip of vacation photos, children’s activity updates or social outings can exaggerate the sense that everyone else is having an amazing life with wonderful experiences. And this can lead people to splurge beyond their means.
Here are three ways to rein in your FOMO feelings so that you’re not spending yourself into debt:
1. Stay focused on your goals – and budget.
Natalie Bacon, a financial planner and blogger with TheFinanceGirl.com, says she muted the FOMO siren call and passed on an exciting girls’ trip to Vegas by focusing on how vacation spending would stifle her student loan repayment progress.
Referring to a list of goals she kept in a Gmail calendar helped boost her confidence in the decision to stay put when scrolling through pictures posted by friends on the weekend getaway.
Bacon says it’s not enough to have a goal, “You have to have it written down somewhere and remind yourself daily.”
Philip Taylor, a CPA and founder of PT Money, agrees that goals can help keep you on financial track. He warns, too, that letting FOMO influence your spending can have an impact beyond your wallet. “If you don’t take care of those things in your life, it can lead to financial stress, poor decision making and lack of progress toward your longer-term financial goals,” he says.
2. Stick with cash instead of cards to curb spending.
For Melissa Thomas, financial coach with Melissa the Coach Financial Coaching, a lifelong dream has been to meet Sir Elton John. To avoid missing out on an audience with her idol, Thomas ran up massive credit card bills traveling to shows on his concert tours.
Her wake-up call came in 2007, when she wanted to attend the performer’s record-setting 60th concert at New York’s Madison Square Garden, held on his 60th birthday. Thomas had no money and no plastic to tap to pay for the trip from Southport, North Carolina. With her cards maxed out, she was forced to miss out and watch – via social media – as her friends enjoyed the historic concert.
Get back to who you are in those quiet moments without the rest of the world intruding in.
Emily Guy Birken
Author, "The Five Years Before You Retire"
Being sidelined instead of near the stage motivated Thomas to start erasing more than $43,000 in debt she had built up chasing Elton John from concert to concert. And tackling her own red ink led her to help others do the same thing.
Thomas stills holds out hope that she’ll one day meet the Rocket Man in person, so she continues to attend his concerts – paid for in cash.
To combat FOMO, she advises avoiding using credit cards to finance fun. “If you go into debt for the little things, then you won’t have money for the big things,” she says.
3. Plan your finances for the long term.
Emily Guy Birken, author of “The Five Years Before You Retire,” suggests keeping FOMO at bay by taking the long view.
Recognize that even people nearing retirement have plenty of life ahead of them in which they will need money, she says. Immersing yourself in constant social entertainment that neglects financial planning is harmful precisely because you don’t know what will come in the future.
Remember, the worst case scenario is not dying young, but living to be 110, she says. Plan for that. Living to a ripe old age increases your chances of living in abject poverty. Keep an age-progressed picture of yourself handy, she says. You’ll feel more protective of your future self.
And tune out Facebook and Twitter to avoid your FOMO temptations and spending triggers. Take a weekend social media fast, she advises. If you balk at the idea of unplugging from social media for an extended period – you may have an acute case of FOMO. If this sounds like you, Birken says, “Get back to who you are in those quiet moments without the rest of the world intruding in.”
Birken says she believes in enjoying life. Just count the costs. “Do the things you love,” she says. “Make sure they’re the things that you actually love and not the things that you feel like you should do because everyone else is doing them.”
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