The Comparison Trap: How Social Media is Ruining Our Finances

In Frugal Living, Personal Finance by Kelby2 Comments

You ever swipe open your smartphone “just to check something” on your favorite social media app and the next thing you know, a few hours have passed, it’s dark outside and your kids are threatening to take the keys and pick up their own food?

No? Me either!

But, let’s just agree that something along those lines could happen and at some point, we all run the risk of falling victim to the time-suck that is (most of) social media.

Facebook, Instagram, and Snapchat all do a great job of keeping us connected with friends and family all over the world. With the press of a button, we can know what’s going on in the lives of our loved ones and feel closer as a result.

Here’s the thing, though.

For all of the connectedness that social media gives us, it mainly provides a false sense of reality.

Every other post is a new car, an exotic vacation, or a picture-perfect family that has managed to get all of the kids to sit still, smile AND look in the right direction at the same time.

via GIPHY  

If you’re a parent of more than one child then you know how hard that last one is…which, to me, confirms that most of what we see on social media is just one big facade.

This is especially true when it comes to our finances.  

The Negative Effects of Social Media on our Money

A recent study by Allianz Life Insurance Company reported that nearly 90% of millennials interviewed believe social media creates a tendency to compare their own wealth or lifestyle to that of their peers.

What’s worse, around 60 percent of those millennials reported feeling “inadequate” about their own life because of something they saw on social media. As a result, more than half say that over the last year they parted with money they hadn’t planned to spend just to keep up.

There’s always been some version of “keeping up with the Joneses” but now the pressure to compete is magnified because the “Joneses” are everywhere you look online — and there are a lot more of them.

Sadly, no one is immune.

Even though I’m perfectly happy with the current state of my life, from time-to-time I’ll find that I’m subconsciously comparing myself to others — wondering how different things would be if I had some of the material possessions or experiences of my peers.

Maybe you can relate.

The reality is, the more time we spend online watching what our friends and family do, the more likely we are to spend money on things that aren’t part of our financial plan.

The Only Thing We’re “Keeping Up” with is Debt

There was a story in the New York Post earlier this year about a 20-something who sank into thousands of dollar of debt trying to live an Instagram-worthy life.

And honestly, I wasn’t surprised.

We all have that one friend who is “living their best life online”, but their offline life is completely different. 

Heck, I’ve been that person!

In my early 20’s, I bought a car I had no business buying, lived in an apartment I could barely afford and went out three to four times a week — spending money I damn sure didn’t have.

From the outside, I looked like I was doing well and had it all together — but that was far from the truth.

*Side Note: Fortunately, this was still in the early days of social media when Myspace was leading the pack, otherwise, there would be photographic evidence of my #StuntinForTheGram or, I guess #StuntinForTheSpace…eh (anyway, shout out to my first online friend Tom)


At some point, I discovered that I wasn’t keeping up with the Joneses, or my friends…I was keeping up with debt and so were most of the people that looked like that had everything figured out.

How to stay on the right financial track (without going completely off-grid)

I’m always intrigued by people that don’t have much of a presence on social media. Ironically, of the five-or-so people that immediately come to mind, they all do a really good job of managing their money.

Coincidence? I don’t think so.

Of course, that doesn’t mean that you have to choose between social media or the proper management of your money — there can be a happy balance. In fact, here are a few things that I’ve been doing to limit the chances of social media derailing my finances.  

Minimize the time spent on social media.

Over the last few months, I’ve made a conscious effort to limit my social media exposure — even going as far as deleting certain apps from my devices. That, of course, doesn’t mean that I don’t periodically visit those sites. It just means that when I do, I’m a lot more deliberate about it.

Instead of spending time aimlessly scrolling through Instagram pictures and reading Facebook status updates when I’m bored, I carve out specific time (5-10 min intervals, 2-3 times a day) to check my social media accounts.

The time I used to waste comparing my life to the highlight reel of my online peers, is now spent on the things that are truly important: spending time with my family, actual face-to-face interactions with friends, etc.

Keep your wants few.

“I make myself rich by making my wants few.” ― Henry David Thoreau

Ironically this post is going live right around the time Amazon is having their Prime Day sale.

For those unfamiliar, for 36-hours Amazon is dropping prices on tens of thousands of items for customers who have signed up for their Amazon Prime two-day shipping service.

Pretty much anything that you’ve ever considered buying on Amazon, is likely 25-75% off.

Personally, I haven’t even clicked on the Amazon app in the last few days and don’t plan to in the foreseeable future because I know that just “casually looking” will lead to wanting (and more than likely buying) something that I don’t really need.

And if we’re being honest, can we really say that we “saved” money by buying something at a discount when we weren’t planning to purchase it in the first place?


Maintain an attitude of gratitude.

It doesn’t cost a penny to be grateful for the things that we already have. The problem is, we’ve grown so accustomed to things like having a roof over our head, clothes on our back, a car to drive, a healthy family, etc., that we neglect to show our appreciation for it.

Social media only perpetuates the problem, convincing us that, although we do have our basic needs met, we could always use a better home, better clothes, a nicer car…you get the point.

That’s why it’s so important to regularly express thanks for the things we have.

Every now and then, take out a piece of paper (a real one, not the notes app on your phone) and write down what you’re thankful for in your life.

There’s something about putting pen to paper and actually writing out those feelings of gratitude that ingrains it in your mind. Not to mention it’s also been found that doing so reduces feelings of envy and helps avoid the retail therapy that comes as a result of comparing your life to others.

To wrap things up…

I know it’s hard to stay away from social media altogether and I’m not even suggesting that you should (*because let’s be honest, most of this website’s traffic comes from social media). However, it’s a good idea to be aware of your triggers and more importantly, the reality of your own financial situation.

So, keep liking the posts celebrating your friends latest purchases and/or extravagant vacations.

Just remember while you’re at it to stay focused on your own financial goals and don’t feel like you need to follow in their (debt-creating) footsteps.

 What about you? How do you avoid falling victim to the social media comparison trap? Let me know in the comments below.


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