The influence of social media is conditioning young people to be anxious about their finances and make impulse decisions, a new study shows.
Some analysts believe the phenomenon is resulting from the effect of influencers inundating their audiences with unrealistic and unhealthy black mirrors
In a survey published July 18 by Bankrate, the leading source of feelings of negativity, such as anxiety, after taking in social media was defined by all U.S. adults as their finances.
The ratio, 34 percent, actually defeated appearance, which clocked in at 32 percent.
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This figure increased to 47 percent among Gen Z and 46 percent among Millennials. Bankrate appears to define Gen Z as respondents in the 18 to 25 age bracket and Millennials as in the 26 to 41 age bracket,
The ratio of financial anxiety was actually higher among female respondents, at 36 percent, than male respondents at 32 percent. However, appearance still weighed in as the number one source of pain for women at 39 percent.
The survey was conducted online between June 22 and 24 among 2,664 adults, with a separate company commissioned to conduct the research.
Moreover, Bankrate found that 84 percent of Gen Z and 77 percent of Millennials stated that social media was playing a harmful effect in their life in one fashion or another.
In the subset of respondents that were also parents, takers were asked to what extent they agree with a statement that their under-18 children are being imprinted with unrealistic expectations about money by social media.
64 percent said they either strongly or somewhat agree.
Almost half of all respondents said they had made an impulse purchase resulting from influences of social media, with 64 percent adding they had regretted the decision.
This figure skewed to 66 percent of all Gen Z and 57 percent of all Millennials saying they had blown money on impulse, with more than 60 percent of both expressing regrets.
The proportion of regret was greatest in women at 68 percent, compared to 58 percent of men.
Ted Rossman, a credit analyst, told Bankrate, “Influencers play a large role in the pressure to make impulse buys on social media platforms. A lot of people feel that they, too, could be that glamorous if only they had that coveted bathing suit or pair of shoes.”
“Social media marketing and the buy now, pay later industry have combined to make it easier than ever to chase this illusion of perfection four interest-free payments at a time,” Rossman added.
As for the cause of anxiety, impulse purchases, and their associated regret, Bankrate asked respondents if they had ever posted things on social media in an attempt to look “successful in the eyes of others.”
46 percent of Gen Z and 38 percent of Millennials responded in the affirmative.
Notably, the outlet found that more than 3 in 4 of both Gen Z and Millennial respondents believed that the people they follow were actually doing the same thing and for the same reasons as they.
Rossman said that the act of scrolling through a social media feed can make users “jealous of what other people have.”
The psychological trick is an advantage for marketers, “We may feel like we can overcome that by overspending to put forth an unrealistic version of ourselves which we hope will impress others,” he stated.
Rossman added that much of the problem is rooted in a lack of upright education, “Unfortunately, most people don’t get a lot of personal finance education at school or at home.”
“Kids and young adults can be especially vulnerable because they’re impressionable and don’t have as much life experience. They may feel that they can trust a certain friend or influencer and they don’t realize that the advice they’re giving may not be the best approach,” he added.
The trend is more troubling than the article elucidates on its own.
In late June, Debt Hammer released results of a poll of 1,500 Americans designed to “study their investing habits” and found that more than 15 percent had admitted to taking out a payday loan or personal loan to speculate in cryptocurrencies.
Digital currencies are a segment heavily promoted on youth-facing social media, often with a cult-like following and environment.
As many as 11 percent said they had borrowed, on average, $500 to $1,000 to gamble with, a frightening situation considering many payday loans come equipped with a 400 percent APR.
A second study in late March published in an academic journal by economists from the London School of Business found that retail traders had managed to lose more than $5 billion gambling on stock options in gamified trading apps such as Robinhood and Webull during 2021’s record-setting bull run.
The economists found a direct correlation between when losing trades were executed by retail traders and when certain “memestocks” such as Gamestop and AMC, were hyped on social marketing and social influencing site Reddit.
In May, data released by an advocacy group for the gambling industry revealed that casinos, online sports books, and iGaming had taken more money from the American consumer in Q1 of 2022 than ever before, generating more than $14 billion in revenue.