NEW YORK (August 24, 2016) – Keeping up with the Joneses could mean the need to match your brother-in-law’s fancy new car, take a more exotic vacation than your friend, or even fertilize your way to a greener lawn than your neighbor. But now this phenomenon has spread to social media – far expanding the circle of people with whom to keep up. A new survey, conducted by Harris Poll on behalf of the American Institute of CPAs (AICPA), found that Americans are caught in a cycle of feeling envious of friends who boast on social media of lavish vacations and purchases, while admitting that they also post things solely because they seem fancy and expensive.
The telephone survey, which polled 1,012 U.S. adults in June, found that two-thirds of Americans (67 percent) have social media accounts. Of those, nearly half (48 percent) visit their most frequently used account more than once a day. This can lead to them being bombarded with images of their friends on tropical beaches or eating fancy dinners in foreign cities multiple times a day. In fact, almost half of all Americans (47 percent) with social media accounts have posted photos of their vacation in the past year.
It’s no wonder that almost four in 10 U.S. adults with a social media account (39 percent) say that seeing other people’s purchases and vacations on social media makes them look into a similar purchase or vacation. And more than one in 10 of these U.S. adults (11 percent) are acting upon their interest and have taken a vacation or made a purchase in the last year after seeing someone’s post. However, there is a fine line between interest and envy and social media is making people feel more insecure. One in four U.S. adults with a social media account (25 percent) were left feeling envious after seeing someone posting about a purchase or vacation on social media in the past year, which is likely not why they created their account.
“Social media has vastly expanded the number of ‘neighbors’ people are trying to keep up with. That can lead to a feeling of financial inadequacy and a desire to spend money you may not have,” said Gregory Anton, CPA, CGMA, chair of the AICPA’s National CPA Financial Literacy Commission. “Some people are purposefully curating a more glamorous image on social media and, unfortunately, it can have a negative financial impact on their friends and followers who feel compelled to keep up with them.”
In fact, more than one in five of U.S. adults with social media accounts (21 percent) admit they are likely to choose an activity or purchase based on how their friends and family will view it when they share it on these social media platforms. And when people are making these financial decisions to help craft an image online, there’s a chance it’s an upscale one. The survey found that 14 percent of Americans with social media accounts say they’ve posted about something specifically because it seemed fancy or expensive.
And while peer pressure can affect people of all ages, it seems to have a greater impact upon younger generations on social media. The survey found that of those with social media accounts, U.S. Millennials (26 percent) are more than twice as likely as Baby Boomers (12 percent) to say the reaction of friends and family on social media affected their likelihood to make a purchase or select an activity. In addition, of those with social media accounts, Millennials (31 percent) were more than twice as likely as Boomers (15 percent) to feel envious of their friend’s purchases or vacations when checking their social media account.
“People, in particular those just beginning their careers, would be better served spending their money maxing out their 401(k) and paying down debt instead of trying to one-up their friends on social media,” added Anton. “While smart financial moves may not get the most likes or retweets, building a solid financial foundation should take priority over building a social media following.”
The National CPA Financial Literacy Commission offers the following advice to avoid overspending in an attempt to keep up with the Joneses either on or offline:
The grass isn’t always greener on the other side of the street. Looks can be deceiving. You may see the new purchases, but you don’t know the amount of debt others have and if they are living beyond their means. Before you buy something, consider the reasons behind the purchase. If you are doing it to keep up with your friends, perhaps you should re-think the expenditure.
Do the planning or suggest alternatives. If your friends want to go to expensive places because they think it will look cool online, suggest lower cost options or be the person who does the planning. Learn to say “no” if an activity really stretches your budget.
Limit your time on social media. If digital envy is a problem for you, try to limit your exposure to once or twice a week. Think about more productive uses of your time.
Use social media to help you control spending. Although social media may cause you to spend more than may be wise, there are new apps that can actually use the power of peer pressure to your advantage. In addition, the AICPA has a number of social media accounts that can help you make better financial decisions. To learn more, see the social media page for AICPA’s financial literacy initiatives.
For more information on the AICPA survey or to speak to a member of the National CPA Financial Literacy Commission, contact Marc Eiger at 212-596-6042, email@example.com, or James Schiavone at 212-596-6119, firstname.lastname@example.org.
About AICPA Financial Literacy Initiatives
360 Degrees of Financial literacy (www.360finlit.org) is a national volunteer effort of the nation’s Certified Public Accountants to help Americans understand their personal finances and develop money management skills. The AICPA and Ad Council have developed the Feed the Pig program (Feed the Pig), a national and localized PSA campaign designed to improve financial literacy among Americans aged 25–34 by encouraging them to make savings a part of their daily lives.
Harris Poll has conducted an annual survey for the AICPA since 2007. This year’s poll was conducted by telephone within the United States between June 23-26, 2016, among 1,012 adults (505 men and 507 women aged 18 and over), including 511 interviews from the landline sample and 501 interviews from the cell phone sample.