Episode: 320 - Social Media's Impact on Your Wallet
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Social media has undeniably transformed how we connect, explore interests, and, quite significantly, how we spend our money. The convenience and appeal of shopping through social media platforms have often led to impulsive buying decisions, potentially causing financial strain. From targeted advertisements to influencer-driven trends, it's easy to get caught in the cycle of overspending.
The Rise of Social Media Shopping
The advent of social media has provided advertisers with unrivaled access to their target audiences. This targeted approach, combined with the captivating visuals and personal endorsements from influencers, makes it challenging to resist the allure of purchasing products that catch our eye. Statistics have highlighted that a significant portion of online purchases now stems from social media interactions. Platforms like Facebook, Instagram, and TikTok have become modern-day marketplaces, influencing consumer decisions at a rapid pace.
Personal Experiences with Social Media Influence
Many of us have made purchases due to the influence of social media. Common anecdotes include buying trendy items like stylish hats or innovative kitchen products that seem indispensable after seeing an influencer use them. While some of these purchases turn out to be worthwhile, others are merely products of momentary desires influenced by the seemingly perfect online portrayals.
Understanding the Marketing Dynamics
Social media marketing thrives on creating a sense of urgency and necessity. Platforms utilize sophisticated algorithms to display content tailored specifically to user preferences. This targeted marketing makes it difficult to ignore promotional content, enhancing the temptation to make a purchase. Peer pressure and the fear of missing out (FOMO) further heighten this impulse, making it crucial to recognize and counteract these influences.
Tips to Regain Control Over Spending
- Unfollow Triggers: Identify and unfollow influencers or brands that frequently tempt you into buying things you don't need. While it can be difficult to break these virtual bonds, it's essential to prioritize financial well-being over online relationships.
- Limit Social Media Use: Reducing time spent on social media can diminish exposure to advertisements and influencer endorsements. Consider turning off notifications or dedicating specific times to check your feeds.
- Set Clear Financial Goals: Establishing short-term and long-term financial objectives can serve as a reminder of what genuinely matters. Regularly remind yourself of your goals to resist the lure of impulsive purchases.
- Implement a Cooling-Off Period: Before making a purchase, especially impulsive ones, wait for at least 24 hours. This period allows emotions to settle and provides clarity on whether the purchase is truly necessary.
- Be Content and Grateful: Regularly practicing gratitude for what you already have can cultivate contentment, reducing the urge to acquire more. Recognizing the sophistication of modern marketing should also motivate more cautious spending behaviors.
Conclusion
Understanding the intricate dynamics of social media marketing can empower consumers to resist unnecessary purchases. By implementing the strategies outlined above and fostering a mindset centered around financial discipline and contentment, individuals can take steps towards healthier spending habits. In an era dominated by digital influence, being informed and cautious can significantly impact financial stability and well-being.
Resources Mentioned
The Totally Awesome Debt Freedom Planner https://www.debtfreedad.com/planner
To learn how to take the stress out of your finances so you can breathe again, follow this link: https://www.debtfreedad.com/lwp-masterclass-opt-in-page-podcast
Connect With Brad
Website- https://www.debtfreedad.com
Facebook - https://www.facebook.com/thedebtfreedad
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TikTok - https://www.tiktok.com/@debt_free_dad
YouTube - https://www.youtube.com/@bradnelson-debtfreedad2751/featured
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Transcript
Brad: 0:00
So social media has transformed how we connect and spend our money, often leading to impulsive buys and financial strain. From targeted ads to influencer-driven trends, it's easy to fall into the trap of overspending while trying to keep up On today's episode, we'll uncover how social media impacts your wallet and, more importantly, how to regain control of your spending habits. Stay tuned.
Anouncer: 0:27
You're listening to the Debt-Free Dad Podcast with Brad Nelson. Brad and his co-hosts experience the anxiety of living paycheck to paycheck before learning the fundamentals of financial success. They are now on a mission to empower regular people to pay off their debt for good and enjoy happier, less stressful lives. Keep listening for inspirational interviews, tips, tricks and practical advice to gain financial freedom.
Brad: 0:55
Hey guys, Brad Nelson, founder of Debt Free Debt. I paid off about $45,000 in debt. I've been debt free now for more than 11 years. I've also helped thousands of other people save and pay off tens of millions of dollars with the work that we do here at Debt-Free Debt.
Amber: 1:08
And I'm Amber Taylor and my husband and I paid off $54,000, and we have been living debt-free outside of our mortgage since 2018.
Chris: 1:17
And my name is Chris Hawkins, and my wife and I started our journey back in 2005, early 2005. So we're right at 20 years of living this lifestyle, and in 2008, we paid off our last debt, except for our house. So we have now been living debt-free for 16 years.
Ryan: 1:36
And my name is Ryan Nelson. My wife and I paid off $160,000 over eight years while raising three kids.
Brad: 1:42
Now, after listening to this episode, if you are ready to take your finances to the next level, you're ready to break free from living paycheck to paycheck, reduce financial stress, you want to build more savings and finally pay off your debt for good, but maybe you're not quite sure where to start.
Brad: 1:56
We've created some incredible free resources to help you get there, and I'll be sharing some details about how you can get started with those later on in today's episode. So, guys, today we're talking all about social media and spending habits, and I got to tell you I'm definitely guilty of purchases made because of social media posts and ads and things I never thought I would need, but now I just desperately need that, and we've shared a couple of those stories on the show over the years. So this is just something that I know is a challenge for a lot of people. I think you look at TikTok and Facebook and Instagram and YouTube and all these social media channels and you look at the stats on how much we are consuming and we're on these apps, and then you look at how much money is spent on ads. I mean, one of our biggest expenses, guys crazy enough is advertising on social media platforms here at DevReeDead, so we know firsthand that this stuff works. You guys, I'm sure have made some purchases off of social media. No, Absolutely.
Amber: 3:01
I have like these cool toques. We call them toques here is that a hat? It's called hats it's a, b it's a. Yeah, how do you spell it? So, anyway. So, yes, I have bought ones that have the lights on the head because we walk the dogs at night. So I was like, oh, these are great, and I I bought it. Yep, an oil thing for my when I'm cooking.
Chris: 3:30
I have barely used it, but yeah if I'm influenced by social media, it's probably something I see somebody using on their youtube channel and I have to admit some of them have been pretty good purchases only because I watch them use it, and so that affiliate marketing is sometimes what gets me.
Brad: 3:47
Well, yeah, for sure, when you see someone using it. And I'll talk about my Blackstone. I was an influencer on the Blackstone for quite a while. I wish I would have had an affiliate program through Blackstone, but never got signed up for that because I sold a lot of them.
Chris: 4:03
Yes, I was one of them. Yeah, me too, which meant I then turned around and bought the Blackstone pizza. So, really, you've got credit for two things.
Brad: 4:11
That's right, and Ryan I didn't. Well, Ryan didn't buy his. I sent him his first year. We did the podcast.
Brad: 4:16
I sent him one I bought him all Blackstone and I sent it out to him, but many people were jumping on the bandwagon because of all the stuff I was showing on there and cooking and I've been one of the influencers too I kind of feel a little bit bad about that. But hey, if they're using it, it's a great investment. But let's talk about some statistics real quick. A 2020 survey found that 35% of US consumers purchasing decisions were influenced by social media advertising, with the impact varying, obviously, by the age groups. That's from Statista. Research indicates that 51% of millennials and Gen Z are more inclined to make impulse purchases online, often driven by social media exposure. That's from Money Plus Advice. Another one said a study revealed that 68% of Americans have made purchases through social media platforms, with Facebook 85%, instagram 59% and TikTok 38% being the most popular for shopping from New York Post. And then content promoted by social media influencers and affiliate marketers accounted for about 20% of US e-commerce revenue on Cyber Monday, making a 7% increase from the previous year. And that's from Business Insider. And then the last one is consumers are 71% more likely to make a purchase based on social media referrals, highlighting the importance of peer reviews and recommendations in the digital marketplace. And that's from Nosto.
Brad: 5:40
So, as you guys can see, I mean we all know it, but the point of this episode is just to make you aware of it. Sometimes it's so easy just to forget, but I do it still. There's cool things that I'll find and it's like, oh, that's really cool. Sometimes I'm so tempted it's like, no, I really don't need that, right. But I could tell you back in the day oh, that's really cool. Sometimes I'm so tempted and it's like, nah, I really don't need that, right. But I could tell you back in the day man, if I was living in this day, and age broke like I was back in the 2000s and trying to get out of debt. Man, social media would not have been a good thing for me.
Amber: 6:08
No, it's hard, Like even for us over the holidays social media and different areas that were just influencing me to oh, this person would love this for the holidays, this person would love that, and I'm just buying like crazy.
Brad: 6:20
it's so easy to get lost and just overspend well, especially when you're bored, social media is so I mean, it's all right there on your phone with a tab of an app. It's open. That's what makes this so hard is that it captures your emotion at the time. Right, right, you have obviously people that you follow, influencers. You've got other people on social media raving about it or in the comments talking about how great it is that they bought it, right. So you have social influence.
Brad: 6:49
And then you combine FOMO, which we're gonna talk a little bit about each of these points, but fear of missing out, and fear of missing out is big. There's a stat on here Approximately 60% of consumers make purchases due to FOMO, with many acting within the first 24 hours of experiencing it, which is fascinating to me. Those are the big four reasons why I think it's such a challenge for all of us is that it's just all readily available and it has all that emotion. You're following these people, you like these people. I did, actually. I just I didn't buy it off of social media but like I love to cook, so I I bought seasonings cause I've been following this guy and he cooks with these great seasonings, and I didn't buy it on social media, I bought it off his website, but I would have never bought that. I would have never bought that, I would have never had that if I wasn't on social media. So again, it's like you said, amber it's easy for it to get out of control.
Ryan: 7:44
Well, and if you think about it and if you're old enough to remember and I think, what they've done, if you go back to when the 80s, when the home shopping network kind of came out, it's very similar. That was that day's version of watching people use products, bringing people on who are buying the products, the fear of missing out, having a timer is only available for 60 minutes and then they talk through it and that's still generating billions of dollars every year. But obviously that's probably more geared towards an older generation. But if you think, like everybody has these phones in their pockets. I mean it just makes total sense. Just take the home shopping network and put it on an app and make people available to buy it. I think it's just, it's very, very addicting.
Ryan: 8:24
You had people when the home shopping network came out and even to this day, that I mean they'll spend thousands of dollars on that. I remember my own dad calling me one day like hey, there's an iPad on here and I want to buy it, and telling me all about it. And he's like there's only this much money all on Home Shopping Network because he's just watching it and he's impulsive, like yeah, I want to buy this right now, and so he called me to get some information before he did. It's amped up so much more now because everything is just 24-7. You don't have to tune into anything, you just open up your phone. Well thing you should open up your phone.
Amber: 8:53
Well, and it's geared to you. Yeah, right, it's geared on what you look at. It's not like the shopping network was where you had to go in and act nah, I'm not really interested in that stuff and you just change the channel. Right, well, now it's geared to you. If you talk about something in front of your phone, all of a sudden, now you're seeing ads for the darn thing, right?
Brad: 9:11
they say they don't listen to us.
Brad: 9:12
I and they're listening they're listening my gosh I can't tell you how many times I've had that happen, where it's like we were just talking about this. Now there's an ad for it. That's crazy. Yeah, it's wild. You have to be aware of that. Marketing has gotten that sophisticated, which I think also makes it very hard. Right the algorithms, the marketing. It's almost fascinating when you sit back and actually look at it all. It really really is All right.
Brad: 9:34
So what are some quick tips to help you guys reduce this kind of spending if you're finding that you're having a hard time sticking to your budget, or maybe even worse, like you're going into debt for some of these purchases and the spending is just out of control. So obviously the easy one is just to unfollow your influencers or brands that trigger spending. Now, this can be hard. I get it, especially because you almost build some sort of a relationship with some of these individuals and some of these brands that you're following. But if they are causing you to spend money, try to limit the amount of time that you're actually watching and viewing some of that stuff. Turn off your notifications on your phone Again, just try to reduce as much of the distraction as you possibly can. We talked about it all the time here on the show.
Brad: 10:19
But I think one of the best ways to reduce overspending, reduce emotional spending and really just improve your finances overall is really setting some clear financial goals and maintain a budget, rather than kind of flying by the seat of your pants where we sit, like we just said today.
Brad: 10:35
Like the marketing is so sophisticated now, I mean, it's so easy for them to get your attention, make it emotional and all of a sudden you're spending money that you didn't plan on it. But when you have goals, when you have good short-term, long-term goals, hopefully those will reign you in a little bit right. They'll bring you back to reality, of no, I really want what I'm working towards and I don't want necessarily this emotional purchase that just popped up on social media. Another one is and this is especially difficult when it comes to social media and advertising is just wait, is just giving yourself a little bit of time, even just as little as a day, 24 hours. Now I know if you're listening to this, I know, and maybe I'll ask you guys too is your guys' Amazon cart have stuff in it?
Amber: 11:18
Right now know, and maybe I'll ask you guys too, is your guys's amazon cart? Have stuff in it right now.
Brad: 11:20
Yeah, no, it doesn't, that's right but I have like a big long wish list yeah, I have a list, but I have a list, like I have an amber's wish list, right and then it goes in my cart once in a while and then it goes back to my list right, no, no, no See, and I think that's great, I think that's, I think a list is good, but I mean, I think giving yourself that little extra time, um, is going to help reduce a ton of overspending, because the emotion of the purchase over that 24 hours is going to go away, and it's not.
Brad: 11:51
You're not going to feel it as much Now. The downside is is that social media advertising is very sophisticated and it knows you already clicked on that, so it'll likely show up again the next day, but you'll, you'll be in a different place and hopefully be able to make a different decision. So instead of being so quick to say, yes, I'm just going to buy this, because everything's so easy to buy right away, just give it a minute, just give it 24 hours. If you end up buying it and it's in your budget, fine, it's just a good way to remove the emotion from the purchase.
Amber: 12:19
Yeah. And you gotta be careful too, because a lot of places you're adding them to your cart If they know who you are, you're getting an email 24 hours later. Did you forget something, right? So now it's like oh yeah, even though you've forgotten, you probably never would have bought it after that. So you might want to be careful where you're adding things to your cart or when you're adding your email address in there.
Brad: 12:40
Right.
Chris: 12:41
Well, I think for the four of us, we've been doing this so long now that it's easier for us not to be influenced. I think I'm not saying all the time.
Amber: 12:51
Speak for yourself.
Chris: 12:52
I got well at least, at least for me. Um, it's easier for me to avoid that because I've been doing this so long. Because, you're right, I do have clear financial goals. I do maintain a budget, I do understand the importance of waiting and thinking about things, and so I think the message I would like to share is that, yeah, you have to say no, and the more that you do it, the better you get at it. Okay, because you see the results of what you're trying to accomplish and why saying no can be important and why it's necessary in a lot of cases, and so the more that you get used to doing it, the easier it is to just say well, no, I don't need that. It's not part of who I am or what I want to be, but it takes time to get to that point. It really does, and so I don't want to anybody listening to this podcast to think that from day one, I was this way.
Anouncer: 13:45
Yeah.
Chris: 13:45
No, no, by no means. It has taken a long time to get here, but I'm a better person for it and you can as well. You just have to practice a little bit of discipline and you're right. If you need to get off social media, stop watching TV, you know. Read, do other things that are going to put different information in your mind. Listen to podcasts like this. I think over time you learn, you get better at things.
Amber: 14:11
One thing that helps me, too, when I find myself going off track, is to really go like okay, what are my goals right now? Where am I going? Is this purchase going to help me get there? Cause right now we're saving for Scotland. So it's like, okay, yeah, no, I would rather spend this money in Scotland, you know, so I'm finding I'm putting a lot of stuff back or deleting a lot of stuff out of my cart.
Chris: 14:33
Exactly, and that's what that's. The message here is when you've got something that's important and you understand where you're going, it gives you a filter. It gives you a question to say does buying this little bubble machine help me get to Scotland to bring back something from the past, or does buying whatever this is help me to accomplish whatever goal I'm trying to achieve? And if the answer is no, then bingo, there you go.
Brad: 14:59
You've got to know it makes it easier to move on.
Brad: 15:02
Yeah, well, and I think the other thing that can really help too is and this is this goes for all kinds of spending is practicing the art of just being grateful and being content. And I know that those are weird words in this day and age, in the society that we live in, cause we're all like more, more, more, more, more stuff, right, but regularly just reminding yourself that you have everything that you need, you have everything that you need, you don't need anything else, you really don't need anything else. And just repeating that to yourself and focusing on everything that you already have, you're less likely to be, you know, always sitting here wanting more all the time, right, and social media is really big at that. So, kind of like what you just said, chris, and you reminded them again, it's just sometimes taking a break from social media, finding other hobbies, finding other ways to spend your time and again focusing on what you already have, can prevent you from spending a lot of money.
Ryan: 15:50
Well, and I think it's about changing your behaviors and just challenging yourself to understand that there's billions of dollars that goes into figuring out how to get you to spend money, and for a lot of us, including me at one point, it's a dopamine hit, it's a I want to buy something, so I feel better. And then I buy it and I feel better and then now I don't feel better. Especially if you look at social media marketing. There's not a lot of overpriced items there that are like oh my gosh, this is $900. It's a lot of small 10, 20, 50, $100 stuff. You don't see a lot of influencers trying to sell you a $500 Blackstone grill or that sort of stuff. They're selling trinkets and lots of small, little $5, $10 things, and $5 or $10 things are easy Like yeah, I'm going to buy this $10. That's for sure. I'm buying that. It's free shipping, tiktok's offering free shipping. I'm going to totally get that. But if you get into that mindset of doing that over and over and over again, 10 bucks adds up really quick, and we've said this on this podcast lots of times. It takes about 27 bucks a day to waste $10,000 a year, and so it's very easy to have a house full of stuff very quickly, and also, from an influencer standpoint, nothing against them. They make money doing it.
Ryan: 17:06
Just realize that they are the hosts of the home shopping network. They're good people, but I'm sure not every single product they're selling is like oh, I just love this and I use it on a daily basis. They have a good following. People reach out to them and say, hey, would you mind doing this on your channel? They do it, so don't look at it as well. If this influencer does it, it must mean they just love it. They it, so don't look at it as well. If this influencer does it, it must mean they just love it. They might use it or they might not. So just realize that they are selling you the product. They're not just there like of their own, free will trying to get you to buy something.
Brad: 17:40
They're making money off you. All right, guys, if you are ready to break free from living paycheck to paycheck, reduce financial stress, want to build savings and finally pay off debt for good, but you're not really quite sure where to get started, don't worry, We've got you covered. Simplify my Money is sent each Sunday to your email. It's your step-by-step roadmap to better financial control and you'll learn easy-to-follow strategies to manage your money efficiently stress-free money decisions that will help you simplify your financial life with proven tips that work, and you'll also gain the tools and confidence to tackle your financial goals head on.
Chris: 18:32
Sign up for a. Simplify my Money by good things, all the bad things that may be. Let's talk about debt. Let's talk about debt Tune into Debt.
Amber: 18:40
Free Debt Tune into Debt Free Debt, and that's how it means it's time for the celebrations of the show. First we have Yvette. I did it. I paid off all of my credit card debt as of the beginning of this month, january 2025,. Thanks to Brad and his Life Without Payments, workshops, his teachings, his budgeting planner and his podcast, I have accomplished in a fairly short time something I didn't think I could. Thank you, brad.
Brad: 19:09
Yeah, that's awesome so proud of her. She worked really, really hard at that, so it's just an awesome place to be. So congratulations to you, yvette. Christina stayed on track and kept within my cash budget. There you go, great one.
Chris: 19:23
And Janine finally got back on track and made my January budget. Missed a few months of doing that, but now it's a fresh beginning.
Ryan: 19:33
Great job, jim. I started week four of Roots and have made and eaten all my meals at home, except one that was a pre-planned dinner with my son and granddaughter that I had budgeted for.
Brad: 19:44
Yeah, great win. And it's okay to eat out and budget for it. Totally fine, so awesome job. Hey, as always, congratulations to all of you guys who are taking a stand for your financial life and are wanting better. Hey, we get that. Getting out of debt isn't easy, but with our help and with your consistency and discipline, we promise you guys, this will be some of the best work that you guys do in your entire life.
Anouncer: 20:15
Thanks for joining us, the Debt-Free Dad podcast. Connect with us on Facebook, tiktok, youtube and Instagram. Just search Debt-Free Dad. If you found value in today's episode, please leave us a rating and review. We so appreciate it. For resources please leave us a rating and review. We so appreciate it. For resources, show notes and links mentioned in today's show visit debtfreedadcom. Catch you next week.
