Want vs. need: battle for your wallet

In the world today, it is so easy to get caught up with buying the newest iPhone that comes out, going impulse shopping online by ordering clothes and tech gadgets, or even purchasing expensive amenities from food to vacations that exceed your budget. Technology plays a big part in all of this because social media and big data tracks your behavior, including patterns and habits, and interprets your likes and dislikes, to analyze and better target to your needs and wants. But there is a significant difference between what you need, on a day-to-day basis to live a comfortable lifestyle within your budget, versus what you really just want, things you see and desire because a celebrity or your peer group has that product.

Many millennials are spending money because of celebrities or social media influencers posting about their “favorite” products on Instagram and in return they feel the urge to buy it to keep up and not get left out. This also means you can be damaging your financial future as habits build up, and when you keep spending beyond your budget or with money you don’t currently have, debt can haunt your finances later on down the road. One thing to keep in mind is that famous individuals that post on social media either have a huge discretionary income or are just being commercially paid to advertise that brand or product, or even both. The idea that you want to constantly own a product based on seeing an image of it, or because that person is a social media icon, can adversely affect your financial well-being in the long run.

Fear of missing out

If every day, there is always one thing that you want to have or do, such as seeing a cool food place your friends go to, but fear that you will miss out, so you habitually spend money haphazardly neglecting your budget, this can make you go in debt or not have money to buy things you actually need. Nevertheless, not being influenced by what you pay attention to online is almost unavoidable, but knowing that it is impossible to buy or do everything celebrities or peers engage in should put you at ease to spend wisely and within budget, instead of splurging on momentary items.

Conspicuous consumption is an alarming issue nowadays as many are using a giant chunk of their income that is not discretionary to imitate the lives of the insanely rich and famous, usually individuals in Hollywood. The Kardashians, Selena Gomez, Rihanna, along with many other celebrity and Instagram influencers are racking up a massive tab on the expense of the general public, especially millennials. What may surprise you and make you think twice next time before you want to buy something is Kylie Jenner makes $1 million per post on Instagram so of course she would want to attract as many people as possible to purchase the things she posts about which generates more money for her.

Habits add up

People all across the country can be falling into the trap of trying to live the lives of those that are at a higher financial status in comparison to them, and ultimately they can be the ones to suffer from this misconception. To combat the temptation of habitually purchasing things you don’t need, some tips would be to limit your time looking at people or brands that make you want to buy stuff and to not save your credit card information on websites to make it less convenient for you to purchase things on the go.

Ease of access is a major aspect of how and why more people today are allowing themselves to be almost addicted to buying things endlessly without thinking of the financial repercussions. Using a credit card, with just a few clicks, you can have already spent a couple hundred dollars. Even seemingly insignificant amounts of money add up, little by little, over time and can result in serious consequences. The next time you are trying to fight the urge to make an impulse purchase, practice staying on budget, and only treat yourself on occasion by not spending beyond your budget on a habitual basis.

The true cost

Need versus want can be differentiated when you really think and ask yourself if buying that good is something you can’t live without or just a reason for you to conform to what everyone else is using or wearing. Targeted advertising from various sources on Instagram, Facebook, Twitter, or all over the websites you visit on the internet can be so sophisticated to tailor to your wants so it makes it challenging to break the habit of impulse purchases, but with a strong will and goal-oriented mindset to stick to your savings and budgeting plan, your costs can go down and that can lead to a more secure financial future.

Costs accumulate over time and to be able to afford your car and home mortgages, and have the opportunity to invest in other things that you may need, going into debt is not a viable option. A Credit Karma/Qualtrics report says “Nearly 40 percent of millennials have spent money they didn’t have and gone into debt to keep up with their peers” and “two-thirds of respondents feel buyer’s remorse after spending more than they had planned to on a social situation that they later regret.” Many of the reasons why they decided to spend the money had to do with not feeling left out, but these instantaneous decisions can leave you behind in the future when your financial budget goes out of control completely.

Social media and spending

Since traveling, food and drinks, music concerts and festivals, parties and events, and other social experiences can be a bit on the pricier side depending on your budget, staying on track, and only splurging on things you need should be the way to go. Social media leading to spending beyond your means can be detrimental to your finances if you don’t watch your expenses as 88% of millennials believe social media creates more of a tendency to compare one’s wealth or lifestyle with others and therefore could influence their decisions to indulge more on purchases.

Spending to try to just stay relevant is not worth it, but to spend wisely can be rewarding in the long run. The only defense in the battle for your wallet is to save first, have your disposable income included in your budget, and to never go into debt for purchases you can’t afford. We at M3 don’t want you to make poor decisions based on emotions. Planning by budgeting can put you in control of your money and we want to make sure you are on track to achieve your financial goals. Figure out your costs and savings using our digital tool today so you can avoid overspending.