Is Your Social Life Affecting Your Savings (or Lack thereof)?
Updated: Feb 11
If you’re in my generation, who grew up watching MTV’s Laguna Beach and The Hills, you know that was our version of Keeping up with The Joneses. Mind you, this was before smartphones ruined the joy of being in the moment, and you can find some refreshing clips of the shows online where teenagers and 20-somethings actually made eye contact or soaked in the moment rather than walk around recording everything in their path or being glued to social media.
The kids at my school would talk about what clothes they were wearing, what kind of new car they got, where they went for Spring Break, and how lavish their parties were. I’ll be the first to admit I had a huge crush on Lauren Conrad (I still think she is a mighty fine lady who carries herself well) and was super jealous of the amazing house she lived in during the Laguna Beach years.
An interesting thing was happening as Laguna Beach was on the networks. In the latter half of my high school experience, the housing market was red hot (kind of reminds me of the market today) and McMansions were being built all over town. Even neighbors on my street were trying to keep up with one another, buying boats, new cars, pools for the backyard, and out-of-this-world Christmas decorations. Compared to some of my neighbors, I thought we were poor!
In fact, another very popular MTV show was on TV if my memory serves me correctly. Does anyone remember that spoiled teen fest called My Super Sweet 16? That whole show screamed Keeping Up With The Joneses. Every teenager wanted a party better than the last, and the best of the best to make sure no one could outdo them. $200,000 on a party was no sweat. Oh, and the car was always the grand finale. It was always hilarious to see some kids freak out over getting a non-luxury car, or a “Mercedes that wasn’t expensive enough”.
Oh, and don’t even get me started on MTV Cribs. At first, I just enjoyed looking at the crazy amazing lives of the rich and famous. Then I realized how it was people distorting my perception of reality, and that I shouldn’t be mad at my parents for not having a bowling alley in our house.
All of this goes to show, that we sometimes do things to impress those around us. We’re especially vulnerable in our youth when social acceptance is the holy grail of life, and we would do anything to fit in. From buying clothes from the same store as the rich cheerleader in school to begging our parents to buy us a Jeep like the kids on the basketball team.
I even think we had it easy in our generation. We didn’t grow up with social media (besides MySpace). Facebook was a thing once I got to college I believe. Made it out of college by the skin of my teeth before Instagram came out.
I realized when social media and smartphones became ubiquitous, that it wasn’t just ads polluting the minds of youth to buy more stuff, it was strategically placed marketing from “influencers”. This was a career field I didn’t even know existed until maybe 5-6 years ago, but apparently, influencers go around asking for free stuff like clothes and hotel rooms in exchange for showcasing them to their followers. If a woman shows off her outfit before going to a party, she can tag the designer or brand and get paid for it. More subtle advertising than “25% off all cocktail attire!”, yet still advertising.
Also, did you know that many items in movies, shows, and music videos are strategically placed? Ever notice how the actor conspicuously shows the brand or label, or the camera zooms in on it? Subtle advertising at its finest. "That actor is so cool and I think he’s so great, if he’s buying those running shoes, then I want them too!”
So, let’s say you delete all of your social media accounts, don’t watch TV, and just listen to NPR. You avoid ads and marketing as much as possible and have become desensitized to them. Are you still susceptible to the bombardment of ads and marketing? Unless you’re a caveman, you bet you are!
Whenever you go out with friends, ever notice how you feel the grasp on your wallet loosen a bit? “I’ll get this round!”, “Sure, I’ll get a Lyft for us” and before you know it, your $50 night out budget turns into $150.
Or perhaps your friend shows up in a dapper outfit, and this is someone you respect. You don’t want to feel less than him, so you go out and buy new Allen Edmond shoes or a Patagonia jacket (love Patagonia though, if you do patronize brand-name designers, buy from the earth-friendly ones!)
Even if you no longer find yourself seething at pictures on social media of over-the-top gender reveal parties with professional backgrounds and “luxury” cupcakes, you still might go to one. And while you are your friends and chatting about what everyone is up to, you might become jealous of someone’s upcoming trip to Scottsdale, or another’s Peloton bike, so after you get home you start looking into those things.
Pretty soon, you start to notice ads on your social media and browser that show..surprise..resort deals around Scottsdale and how good you’d look on a Peloton! So, not only is the thought of your friend's consumption patterns swirling around in your head, they are chasing you around everywhere you look.
To add insult to injury, you’ll probably start to notice those items when you are out and about. Have you ever gone car shopping (hopefully not in this crazy-hot used car market) and after figuring out the car you want, you can’t help but notice and point it out in public?
Now, I’m no psychologist, but a similar tactic is at play here. You’ll see Scottsdale mentioned on the news and immediately tune out everything else. You’ll walk past the stationary bikes at the gym and immediately think of a Peloton. Heck, you might even think of one just by seeing your neighbor’s kid riding his bike along the street!
So, as you can see, your social life is very much correlated to your savings rate, or spending patterns I should say. If you have friends that are all about “hauls” and wearing name-brand everything at your weekly mimosa brunch, you’ll have a hard time sticking to your budget. (Time to find new friends, especially if they gasp at you just joining brunch for the company and not food!).
If you’re lucky enough to have friends that are in the same mindset as you or at least share similar values such as being minimalists, then practice being vulnerable with them and ask them for tips on how to stay on track when you’re hanging around friends or family who are not in the same mindset.
An automatic savings plan can help here, as the bucket system, so if you don’t have enough in that bucket or your savings account, you have to strengthen your willpower to stick to the plan and see if that splurge is in the cards next month.
And if you don’t want to alienate yourself from your liberal-spending friends, consider suggesting a free/low-cost activity in lieu of what they are suggesting, such as picnics in the park, potluck at home, or a hike. For more ideas on this, I’ve got whole chapters on the topic in Financial Fives.
At the end of the day, know your end goal for your money, don’t sweat little splurges here and there, and never, ever feel like you have to spend to sustain a friendship or a certain “social status”.