Beware the Dangers of Social Media Lifestyle Inflation

Multi-ethnic bachelorette party toasting with champagne
When I was growing up, it was a cliche that older people had had it so much tougher when they were young. After all, they had to walk miles and miles to school. Sometimes in the snow, or uphill (both ways), depending on how much they wanted to exaggerate. Or maybe, they just wanted to shut up our petty complaints.

My, how times have changed. As housing and college prices have skyrocketed, the older generation is coming to realize that today's younger generation doesn't have it so easy. We might enjoy more everyday conveniences, but we also face a lot of new challenges.

And some of those challenges are psychological. We are bombarded with pressure form our peers -- to look a certain way, to buy specific things and to have particular experiences. And while, admittedly, every generation has experienced that to a degree, social media adds a whole new level to the old peer pressure.

Why All the Pressure?

When we see celebrities or the ultra-rich showing off their massive houses, it's easy to brush those images off as something unattainable. The same goes for their high-end designer clothes, luxury cars and private jets. A small part of us may desire those things, but we recognize that it's just fantasy.

The scenario drastically differs when we see our friends and acquaintances enjoying luxuries. Suddenly, all of those material possessions and pricey experiences seem normal, and reasonable. Hey, if Steve from my sophomore English class has a new Porsche now, don't I deserve a nicer car too? It's only natural to feel some envy. This is where Generation Y's sense of entitlement comes in. We feel entitled to so much because we know people who have all that great stuff. And we're constantly bombarded with photographic proof.

Our social media friends aren't trying to make us jealous.

Obviously our social media friends aren't trying to make us jealous. Unless they happen to be jerks, they're either just proud or they want to be more socially accepted. When you post photos of your new car, new house or latest vacation, you're bound to receive some kind of praise or reassurance. This just continues the cycle as others see those comments and want that acceptance. On the flip side, most people don't share their struggles and the sacrifices they had to make to get where they are. The result is a very distorted overall view of our friends' lives. Talk about some rose-tinted glasses!

In 2014, the average American has 350 friends on Facebook (FB), according to Statista, with younger people having significantly more than that. With that many people on your news feed, chances are that some will be boasting of things that you'll envy. A generation ago, if your friends wanted to show you their new house or big TV, you had visit them to see it: Temptation and jealousy weren't just a click away.

As motivational speaker Jim Rohn says, "You are the average of the five people you spend the most time with." So, people are likely to have similar levels of financial success to their closest friends. The level of envy among your closest friends usually wouldn't be very high -- otherwise you might not stay close friends with them too long. But with hundreds of not-as-close friends displaying their latest splurges on social media, envy is inescapable.

How Do We Avoid Social Media Lifestyle Inflation?

As much as we would benefit from avoiding social media lifestyle inflation, it's easier said than done. I haven't unfriended anyone, but I did remove most people's updates from showing up automatically. By restricting the automatic updates to only my family and close friends, I cut down on a significant amount of temptation. If I really want to see what Steve is up to, I can check his profile without seeing everyone else's eye candy.

When I'm not seeing the materialistic purchases friends are making, I'm thinking about those items a lot less and don't get obsessed about needing them too. It works the same way for vacations. If I was seeing pictures of people on nice vacations all the time, I would be a lot more likely to feel the need to take a trip sooner. Plus, I'd stand a higher chance of wanting to experience all of the specific highlights my friends are sharing.

Perhaps this strategy limits my social contact, but I do a lot of work on the computer and I want to stay efficient. This way I have more to talk about with friends when I do see them. It's not the typical conversation of today where you or your friend inevitably tell the other person that that news was already on Facebook.

If you do feel the need to track what everybody is up to, keep it all in perspective. Imagine it like an iceberg –- you may see what's above water, but there is way more that you are not seeing below the surface. Be realistic about your wants and needs. Don't let envy control your finances.

Jeremy Biberdorf blogs at modestmoney., a personal finance blog for everyday people. Check out his list of his favorite personal finance blogs.

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Try to remember that your FB "friends" don't own that new car, new house, etc. The bank and/or finance company does. And that exotic vacation trip was probably charged to a credit card. The habit of going out for drinks with co-workers, after the work day ends, is something else that usually ends up being charged to a credit card.

Most people are great at "showcasing" themselves in an effort to appear rich, when they really are just living from one paycheck to another and paying the minimum on their credit card balances.

We are all so over-exposed to this free-spending lifestyle that it is very tough to break out of this pattern. The urge to blend in and be part of this mindless herd of spenders is very strong. As one example, every time someone gets a pay raise, or a tax refund, or any sort of cash windfall, the first mental impulse is to think: "What can I buy with this?". Getting a better job, with a higher rate of pay, usually results in ratcheting up the spending level to appear to be "richer", too.

If you just run with the herd, like this, year after year --- you are going to be broke all your life. It's absolutely essential to kick the habit of endless spending and replace it with learning to save and invest.

Unfortunately, saving doesn't give you the immediate "high" and illusion of power that spending does. It does take a little while to start seeing your savings growing and your investments creating a better net worth. Then, saving will feel better than the endless round of spending ever did.

July 23 2014 at 8:49 AM Report abuse rate up rate down Reply