The changes to our daily lives of late have caused us to re frame our views on ‘screen time’, an activity that now more than ever takes up a significant proportion of our day.
However, as we spend more time online we are also spending more cash, and it pays to be mindful of the ways our browsing habits impact our hip pocket.
With the average Australian spending over six hours on social media every week, it’s safe to say we’re affected by what we consume online.i This can happen consciously, from actively looking up brands and products, or subconsciously, through viewing advertisements directed at us.
Social networking to selling
When Facebook first started gaining popularity in the noughties, its focus was on social networking. By 2016 it had evolved into a marketplace in which users could sell to each other, regardless of whether they were connected. Facebook also had over seven million advertisers during the third quarter of 2019 alone.ii So when you log into your Facebook account these days, it’s just as likely that you’ll end up buy something than socialising.
Instagram has similarly developed beyond simply sharing photos. A 2019 survey showed that 81% of respondents use their accounts to research products and services, and 130 million users view shopping posts each month.iii,iv
Easy social shopping
The sophisticated and seamless purchasing experience offered by social media platforms has made shopping even easier. Buy now, pay later services such as Afterpay also make it easier to purchase online through installments.
Hard to resist targeted advertising
Data collected from social platforms allows marketers to target individuals based on their demographics, interests and online behaviour. Have a look at the ads that appear when you next log in – chances are they’ll be relevant to you. Your data, such as your browsing history and the apps you use, can be tracked and used to present targeted advertising on your feeds.v This practice isn’t a secret, but it can still be surprising (and even unsettling) how tailored this advertising can be. With advertising pinpointing your real and anticipated needs, it can be hard to resist buying. And with data kept from previous ads you responded to, you’ll see even more similar ads popping up – keeping you in the spending loop.
Influencing our buying behaviours
‘Keeping Up With The Joneses’ is prevalent on social media, where people compete for the most likes. But it’s not just envy which induces us to spend. We turn to those we trust when it comes to making decisions, which is why when we see friends, families and ‘influencers’ using a product or service and having a positive experience, it acts as social proof.
Fear Of Missing Out
FOMO – it’s a thing, and something that can be worsened by social media, making it tempting to spend on the latest gadgets or lifestyle trends. Comparing yourself to others can create anxiety and also induce spending in an effort to ‘keep up’. However, there’s a growing movement towards JOMO, the joy of missing out.
With financial anxiety on the rise, JOMO is much better for our hip pocket than FOMO.vi
Watching your hip pocket when it comes to your social spend can be challenging. If you are concerned about your spending, set a budget which allows for the amount of online shopping you are comfortable with. It’s a good idea to keep track of your purchases to ensure your spending is not to the detriment of your day to day needs or your long-term financial goals.
Finally, just having a greater awareness of how social media influences your behaviour will help you to resist the subtle enticements of social marketing.
If you would like to speak to a financial planner about your spending habits, contact us on 03 5120 1400.
vi https://www.news.com.au/finance/economy/australianeconomy/younger-australians-are-embracing-the-joy-ofmissing-out-as-financial-anxiety-takes-its-toll/news-stor y/11ac6520fa3be768d885b855ae0c8c76
Material contained in this publication is a summary only and is based on information believed to be reliable and received from sources within the market. It is not the intention of RGM Financial Planners Pty Ltd ABN 36 419 582 Australian Financial Services Licence Number 229471, RGM Accountants & Advisors Pty Ltd ABN 69 528 723 510 or RGM Finance Brokers Pty Ltd ABN 81 330 778 236 (RGM) that this publication be used as the primary source of readers’ information but as an adjunct to their own resources and training. No representation is given, warranty made or responsibility taken as to the accuracy, timeliness or completeness of any information or recommendation contained in this publication and RGM and its related bodies corporate will not be liable to the reader in contract or tort (including for negligence) or otherwise for any loss or damage arising as a result of the reader relying on any such information or recommendation (except in so far as any statutory liability cannot be excluded).
Liability limited by a scheme approved under Professional Standards Legislation.