Millennial Financial Confidence and Social Media

The Millennial Generation and Social Media: How
online relationships affect Millennials’ financial esteem
Abstract
One of the largest generations in history is moving into its prime spending years. The Millennial generation, as a technologically savvy culture, is looking to reshape the economy, taking their unique financial experiences into the way they look to spend their money. Having lived through the 2008 Great Recession, however, Millennials are haunted by the unexpected obstacles an inconsistent economy poses. They exhibit immense distrust with financial institutions due to struggles during their financial upbringing, and are the first generation to have accumulated excessive amounts of student loan debt. Therefore, the Millennial generation takes pride in practicing frugal spending habits, making sure to put money into their savings account each month. However, Millennials are also heavily influenced by their relationship with their peers via social media platforms. The self-presentation theory can be used to explain why social media influences millennials, as the desire to receive social acceptance drives millennial behaviors. As statistical evidence has proven, Millennials feel a heightened sense of social acceptance when physical symbols of social adequacy are shown through “like,” “favorites,” “retweets,” or “share.” Millennials also place an emphasis on experiencing live events rather than material items, explaining that these events are more enjoyable when shared through social media. Studies have also shown that the positive reinforcement Millennials receive from “likes,” “favorites,” or “retweets,” weighs heavily into their monetary decision making. Therefore, the argument can be made that the relationships Millennials pursue through social media negatively influences millennial spending as photos and posts on their newsfeed encourage reckless spending, relying heavily on funds received only through their increased debt accumulation.

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Introduction
Millennials represent the largest living generation and more than a quarter of the population at 83.1 million, surpassing Baby Boomers at 75.4 million (Cutler, 2015). Because of the Millennial generation’s massive size, understanding and adapting to their spending tendencies is imperative to a company’s growth financially as the generation currently commands an estimated $1.3 trillion in annual consumer spending (Eventbrite, 2013) Many studies have been conducted between the Millennial generation and financial institutions, identifying their experiences and attitudes which in turn help to shape how they interact with one another. Millennials, having lived through both the 2008 Great Recession and the digital revolution, are making constant decisions involving their money allocation. However, they are experiencing greater financial struggles. Millennials are the first generation in the modern age to experience high levels of poverty and unemployment, causing many to lose faith in financial institutions, and experience high levels of stress when allocating money from small, seemingly insignificant paychecks (Cutler, 2015). Due to these struggles, the Millennial generation takes pride in their financial planning, prioritizing conscious spending in order to avoid financial problems in the future, and feeling confident in their education to land them a successful career. However, the emphasis Millennials place on maintaining a social media deemed acceptable by peers is translating into harmful financial behaviors. In 2015, almost 50 percent of Millennial purchases were influenced by social media (Pagliara, 2017). Therefore, the understanding of the necessity to spend consciously is distanced by social media’s created desire to spend recklessly due to the emphasis Millennial’s place on media “likes” as a visual representation of social acceptance. Through a brief overview of the general Millennials’ financial outlook compared to generations prior, combined with both an analysis of how Millennials interact with social media and how social media influences their spending habits, an argument can be made and then supported that the relationship between social media and the Millennial generation negatively affects their financial stature.
Literature Review
The Millennial Generation’s Overall Financial Outlook
To better understand the fundamental attitudes and beliefs Millennials hold regarding financial institutions, it is important to first compare the monetary characteristics of the Millennial generation to both itself as well as previous generations including Baby Boomers and Generation Xers. After comparing Millennials’ early-life economic experiences to those of Generation Xers and Baby Boomers, The Pew Research Center found that, while Millennials are the most educated generation in American history, they also serve as the first generation to have higher student loan debt, poverty, and unemployment combined with lower levels of wealth and personal income (Cutler, 2015). With the high cost of education, the Pew Research Center added that, as of 2015, two-thirds of recent bachelor degree recipients have outstanding student loans averaging near $27,000 compared to graduates two decades ago with student loans averaging only $15,000. A 2014 Wells Fargo Millennial Study conducted by Harris Poll found 42% of Millennials describe debt as an “overwhelming financial concern” as compared to only 23% of Baby Boomers. Furthermore, the study concluded that Millennials list student loan debt as their top concern while Baby Boomers focus on saving for retirement. Due to the burden of piling debt combined with difficulties landing successful jobs right out of college, Millennials immediately perceive a disconnect between the money spent on education and future earnings, developing a deflated, negative financial self-image early in their careers. A 2014 survey conducted by Pew found that a mere 42% of Millennials identify as middle class, a significant fall from the same survey conducted in 2008 where 53% of Millennials claimed themselves as middle class. Most significantly, however, the same survey also concluded that, in 2015, 46% of Millennials identified as low-middle to lower class, a notable rise from 25% in 2008. Contradictory to this statistic, however, the Pew Research Center found that 85% of Millennials are optimistic when asked about their future financially, saying they have enough to live comfortably now and plan to save enough to create a lifestyle they want in the future (Cutler, 2015). This statistic gives an insight to how Millennials view their future wealth, offering valuable information regarding their thoughts on how to spend their money today. While financial optimism is necessary for confident future spending, Millennials currently experience poor financial self-image, affecting their spending habits today as they are forced to make hasty decisions that will hopefully increase their savings so they will have enough financial support to spend generously in the future.
These statistics can be better
explained through an in-depth analysis of the basic attitudes of the Millennial
generation, identifying why Millennials perceive low financial self-image.
Another study conducted by the Pew Research Center suggested Millennials
experience greater institutional distrust than generations prior. When asked
about the level of trust Millennials have in authority figures, government and
financial institutions, and the general public combined, only 19%, or one in
five, felt as if they can be trusted, a statistic much lower than 40% of Baby
Boomers who responded to the same question (Cutler, 2015). This institutional
distrust Millennials experience may be due to both current and previous
economic experiences that have frightened them into becoming an innate
generation of thrifty savers, while simultaneously being impulse spenders, a
topic which will be discussed in the following analysis. The Great Recession in
2008 influenced the Millennial generation’s perception of economic institutions
as many either struggled through the recession themselves, or observed the
financial turmoil their parents experienced. Many Millennials describe the
Great Recession as a warning to save now in an effort to survive unforeseen
economic problems in the future. The recession also caused many Millennials to
graduate into an environment burdened by high unemployment rates and
undesirable salaries as jobs gained during the economic recovery paid on
average 23% less than jobs before the recession (Boberiene & McLeigh,
2014). Emily Pachuta, head of investor insights at UBA, explained that due to
the recession, “[Millennials] have a Depression-era mindset largely because
they experienced market volatility and job security issues very early in their
careers.” (Boberiene & McLeigh, 2014). Millennials are also skeptical when
discussing government funding, especially when planning for retirement. A
Harvard poll found that 51% of Millennials believe there will not be any funding
available in the Social Security System by the time they retire. Additionally,
a Wells Fargo Millennial Study found that over 50% of Millennials have already
started allocating anywhere between 1% to 10% of their paycheck to retirement
funding. Another Harvard poll noted that young people feel a disassociation
between their priorities and the priorities of elected officials as they view
effective results from political involvement as few and far between (Rampell,
2014). A 2014 article from the Grand
Rapids Business Journal argues the 2008 Great Recession made Millennials
timid about investing in financial markets, creating this desire for
transparency and authenticity when dealing with companies and organizations
(Marsh Private Client Services, 2015). Adding to their fear of financial crisis
in the future, Millennials also struggle with the pressure of debt. As
previously mentioned, recent graduates have significantly more student loan
debt than graduates two decades prior. Among all Millennials, Wells Fargo found
47% of working Millennials are allotting 50% or more of their paycheck to
certain categories of debt including credit card debt (16%), mortgage debt
(15%), student loan debt (12%), auto debt (9%), and medical debt (5%). Because
Millennials are allocating a large sum of their paycheck to paying off their
accumulated debt, many are living paycheck to paycheck, leaving little to no
cash left to spend elsewhere.
After reviewing the statistical
analysis of the Millennial generation’s experiences, thoughts and feelings
regarding financial institutions and their own personal finances, exploring
generic personality traits may find a direct correlation to between
millennials’ innate behavior and their desire to maintain a positive image on
social media adding which, therefore, progresses their poor financial
experiences. As mentioned previously, Millennials are money-conscious due to
the economic hardships they’ve endured. However, Millennials are also heavily
influenced by social media, and the pressure to maintain a noteworthy lifestyle
sometimes overrides their instinct to save. Social Media has affected
Millennials in such a way that theorist have discussed they have become
sub-clinical narcissists. Clinicians do not see sub-clinical narcissists as
pathological, however there are traits of self-centeredness and self-love
through the eyes of a personality psychologist. The perception of Millennials
are self-loving, ambitious, technology savvy, and family oriented. Vaidhyanatha
Balaji (2015) oversaw a study of a group of Millennials through a survey about
subclinical narcissists habits. The survey revealed that they did not show a
developing problem of narcissism even though Millennial scores were just above
global average of subclinical narcissism (Balaji, 2015). Balaji summed up
Millennials as “complex individuals who are part self-centered, part-social
human beings.” Millennials are greatly influenced by positive reassurance,
their need for constant attention and feedback. They are concluded to be very
independent and self reliable while being conservatively confident. The
combination of both slightly narcissistic characteristics and ambitious
characteristics argues that the Millennial generation has altered the
definition of a career. Millennials are less committed to following the
traditional corporate ladder, and more likely to seek business opportunities
that accommodate their own personal values, including flexible hours, autonomy,
and control, while simultaneously proving they have the maturity to support themselves
independently (Boberiene & McLeigh, 2014). On the other hand, a study
conducted by the Family Office Exchange (2015) indicated that Millennials
working for corporations feel they must be able to relate to their advisors on
a personal level before they trust them in a business setting. The 2015 study
also indicated that Millennials are less likely to listen to supervisors who
speak in a demeaning or condescending tone. Instead, Millennials respond to
supervisors who focus on establishing a relationship by asking personal
questions about their interests, goals, and opinions and then sharing personal
stories of their own (Marsh Private Client Services, 2015). Because Millennials
emphasize engagement, the study argues that Millennials are driven by personal
relationships, with a desire to showcase independence on the surface, however,
wanting collaborative attention in the form of both positive, constructive
advice and feedback (Marsh Private Client Services, 2015).
Theoretical Framework
Researchers have warned Millennials
regarding their reliance upon social networking sites to reinforce personal
self-esteem through boosted “likes” or positive comments from close friends as
this behavior can result in the reduction of self-control both on and offline.
Researchers at the University of Pittsburgh and Columbia Business School found
that users who are focused on close friends tend to experience an increase in
self-esteem while browsing their social network (Stephen & Wilcox, 2013).
Afterwards, however, these users display less-self control which is evidently
correlated to these individuals having higher body-mass indexes and higher
levels of credit-card debt (Stephen & Wilcox, 2013). A study conducted
regarding the use of Facebook and its effects in its users self-esteem found
that Facebook only increased participants’ self-esteem when they were focused
on the information they were presenting to others (Stephen & Wilcox, 2013).
Keith Wilcox, assistant professor of marketing at Columbia Business School and coauthor
of this Facebook research experiment, explained that, “We find that people
experience greater self-esteem when they focus on the image they are presenting
to strong ties in their social networks. This suggests that even though people
are sharing the same positive information with string ties and weak ties on
social networks, they feel better about themselves when the information is
received by strong ties than be weak ties.” Keeping this information in mind,
the study continued with its investigation on the relationship between online
social network use and offline behaviors associated with poor self-control
(Stephen & Wilcox, 2013). The results suggested that greater social network
use is associated with a higher body-mass index, increased binge eating, a
lower credit score, and higher levels of credit-card debt for individuals with
strong ties to their social network (Stephen & Wilcox, 2013). Therefore,
this study can make the implication that self-control is an important mechanism
for maintaining social order and well-being, however, the desire for positive
reinforcement on social media outweighs rational, controlled decision making.
To better understand the loss of
control experienced through social networking site interactions, the
self-presentation theory can be used to explain how influential social media
has become during the management of an individual’s private and public self.
Self-presentation is the process by which individuals represent themselves to
the social world, occurring at both the conscious and the unconscious levels of
cognition (International Encyclopedia of the Social Sciences, 2008).
Self-presentation can be used as a means to manage the impressions others form
of oneself, extending into strategic or tactical self-presentation, otherwise
known as impression management, which occurs when an individual seeks to create
a desired image of invoke a desired response from others (International
Encyclopedia of the Social Sciences, 2008). Largely a prosocial event,
self-presentation forces an individual to negotiate through social interactions
in order to fulfill the psychological needs for social approval.
Self-presentation is complex as it involves both the individual’s interpersonal
cues such as the perceived responses of others, and the function of social
situations in response to cues from the social environment (International
Encyclopedia of the Social Sciences, 2008). Therefore, self-presentation is
both an individual experience and a social phenomenon, highlighting the
tensions between human interactions (International Encyclopedia of the Social
Sciences, 2008).
Much of the content produced on
social media is photographs, links and information posts used to present one’s
online self. Self-presentation theory, as discussed previously, is considered
to be motivated by the desire to make a favorable impression on others, or an
impression that corresponds to one’s’ ideals, which an extend to the projection
of an online identity (Herring & Kapidzic, 2015). Social media provides a
platform for Millennials to explore the effects of their self-presented image
on their peers. Generally, photo posts, as well as text posts occasionally,
generate positive feedback and, thus, have a positive impact on self-esteem.
Visual content is a central resource for creating an appropriate online
impression, and an attribute many Millennials focus on when seeking social
approval. Therefore, the self-presentation theory helps to support the
hypothesis that Millennials participate in reckless spending in order to create
an adequate online image when viewed by others.
Methodology
To determine the extent to which
social media influences the Millennial generation’s financial stature, research
will be focused on an analysis of statistical evidence regarding first, Millennials’
emphasis on the need to experience social acceptance on various social media
platforms, then, on how social media influences the spending tendencies of
Millennials’ frugal minds. The background information presented during the
literature review was necessary to understanding how previous financial
struggles have controlled the spending habits of the Millennial generation,
training them to recognize the necessity to conscious spend in an effort to
maximize a financial future. The statistical evidence will then support the
argument that social media creates a divide between the understanding for
frugal spending and Millennial actions as they are coerced into spending
recklessly in order to achieve social approval from their peers via social
media recognition.
Findings
Social Media and its Relationship to the Millennial Generation’s Social Acceptance
After reviewing background information on Millennials’ financial experiences, it is evident that Millennials have established an inherent necessity to save due to their poor financial self-esteem created by an immense amount of debt accumulation and financial distrust. However, I make the argument that Millennials are distanced from their understanding of the necessity to save due to their overwhelming desire to portray an over-exaggerated, lavish lifestyle on their social media sites. As subclinical narcissists who showcase self-sufficiency on the surface while subconsciously craving positive reinforcement from their peers through social media acceptance, Millennials have prorized their online relationships, placing an emphasis on depicting a life of interest within the social realm, and, ultimately, altering how they think about real world friendships and relationships. To better understand the impact social media has had on Millennial relationships, a brief background on how online interactions has influenced the dynamics of young people’s social lives is explored in the following analysis.
A 2016 study conducted by the Nielsen Norman group found that premature exposure to social media has influenced Millennials’ approach to friendships, relationships and self-image as their subtle online interactions have become explicit and visible, causing social contexts to become merged and entangled. In 2006, the Pew Research Center found that 55 percent of teenagers reported having at least one social media account. However in 2010, just four years later, 73 percent of younger Millennials, around the age of middle to high school adolescents, and 78 percent of older Millennials, college-aged young adults, reported having a social media presence (Meyer, 2016). Today, approximately 90 percent of Millennials, both teens and young adults alike, have at least one social media account, many of them updating an average of four or more accounts at a time (Meyer, 2016). With the attention Millennials place on creating and maintaining positive online interactions, social media has also become a means of expressing the extent of personal relationships. For example in 2004, the social media site MySpace added a “Top 8” feature, which allowed for teens to manually choose their top 8 friends. They were soon after forced to remove the display feature because it became an anxiety-inducing decision for many young Millennials (Meyer, 2016). Other popular social media terms such as, “friending,” “Facebook official,” “likes,” or “favorites” are visible, quantitative expressions of the positive reinforcement Millennials feel toward a person, event, or opinion. A study conducted by researchers at UCLA explored the effects of social media “likes” on the Millennial brain. A “like” is a click made by a social media user that symbolizes an instant, outward expression of approval. The study found that, regardless of the basic qualities of the photo or post, Millennials revealed more excitement in the reward center of their brains when they viewed a photo or post with many “likes” (Meyer, 2016). Therefore, “likes” symbolize augmented social proof and acceptance, representing the peer pressure Millennials feel to remain socially intriguing. One of the most widespread instances of social proof gained from social media is the number of “retweets,” “favorites,” “likes,” or “shares” received on a photo or post (Tate, 2018). Social proof can be used to explain why Millennials worry about straying too far from the pack, or looking inadequate to comparison to their peers. As mentioned previously, Millennials crave group acceptance more than they desire individuality. Therefore, social media serves as a resemblance of what the group is doing, allowing for Millennials to learn what is deemed socially acceptable, and then find comfort in the recognition that their actions are “normal” (Tate, 2018).
Adriana Manago, an assistant
professor of psychology at UC Santa Cruz who studies the social media
tendencies of adolescents and young adults, explains that Millennials are using
social media to establish their own agency and manage their relationships with
their peers (Witte, 2017). Manago theorizes that Millennials use technology as
a tool used to navigate their way into adulthood, explaining that young adults
turn to social media to explore their place in the world around them (Witte,
2017). Therefore, social media helps Millennials feel more connected within the
offline world as it provides a space for identity exploration, bridging the gap
between the offline and online worlds. The online realm provides Millennials a
platform to manage social contexts by practicing and participating in specific
social behaviors without the pressure of visibly or physically backing their
actions or remarks. When Millennials participate in social media activities,
they are experiencing a context collapse, or the requirement to accurately
perform varying social behaviors in order to appropriately manage different
social media contexts (Boyd, 2014). For example, a Facebook post and an
Instagram post may be the same message, however differ in the delivery
depending on the platform’s audience or following. In other words, each
distinct audience requires a different social behavior in order to interpret
the post appropriately. Context collapse, as determined through various
studies, is more complex for adolescent Millennials as they navigate an intense
period of self-definition (Boyd, 2014). Millennials, therefore, have invented
strategies to help them manage the merging of various social contexts, relying
heavily on the approval of specific audience members on each social media
platform they maintain. Boyd (2014) in her book, It’s Complicated: The Social Lives of Networked Teens, found that
Facebook is considered to be the most diverse in connections with audience
members ranging from online seniors (65 or older) regularly operating their
Facebook page to employers actively searching profiles for potential employees.
Twitter was found to represent connections with special interests such as news,
celebrities, musicians, or companies, and less with friends and family members
(Boyd, 2014). Instagram was reported to be the most entertainment-oriented platform,
primarily used for sharing photos of experiences or interests with friends and
followers (Boyd, 2014). Therefore, Millennials’ decision on where to share
photos or posts depends on the interests of the audience members following each
platform, as well as the visibility of the post in order to render the most
social interaction possible. When asked where to post a photo, one Millennial
responded, “It depends on the quality of the picture, and who would see it. On
Facebook it’d be primarily family, because those are the people who pay
attention to my page. On Twitter, depending on the time of day, it might not be
seen at all.” (Boyd, 2014). Therefore, the stress of managing multiple
audiences across several social contexts puts pressure on Millennials to
constantly maintain an acceptable social media presence.
Social Media and its Relationship to the Millennial Generation’s Finances
As discussed previously, the money
habits of Millennials allude to the potential for a better financial position
than previous generations, as Millennials instinctively understand the
necessity to save. Millennials continue to take strides toward a strong,
self-sufficient financial future, with 58 percent prioritizing saving for
retirement as an essential necessity (Riley, 2018). Another 71 percent of
Millennials reported using tricks encouraged by financial advisors to set aside
money in an effort to achieve specific monetary goals, while an additional 41
percent said they always allocated money into their savings accounts each month
(Riley, 2018). The “Generations Ahead” study conducted by the Allianz Life
Insurance Company (2018) found that 77 percent of Millennials feel financially
confident due to their ability to consciously save, a drastic difference
compared to only 64 percent of Generation X respondents when asked the same
question. Similar to the Allianz Life Insurance study, “Generations Ahead,” the
Wells Fargo Millennial Study also found that seven in ten Millennials, or 69
percent, feel more financially stable than others in their own generation, and
68 percent see themselves with a better standard of living before retirement
than previous generations. Therefore, it can be concluded that Millennials
reflect a higher financial self-image when comparing themselves to their own
generations rather than to generations prior. This indicates that Millennials
may be more inclined to spend recklessly in an effort to showcase falsified
high financial stature, even if it is financed primarily through debt
accumulation. Additionally, the Wells Fargo study concluded that 84 percent of
Millennials feel they have the skills to be successful in their chosen careers,
and another 78 percent confidently believe if they were to lose their job, they
could find a comparable career with ease. Therefore, as Millennials feel more
successful with their financial planning through innovative ways to build
financial strength, they are becoming more confident in their abilities to
spend wisely. However, Paul Kelash, vice president of communication and
consumer insights for Allianz Life, explains, “The most significant finding was
the dichotomy between Millennials’ ability to be successful in financial
planning yet so vulnerable to social media and spending beyond their means.”
Therefore, the pressure social media places on Millennials to maintain an
appropriate presence contradicts Millennials’ appreciation for frugal spending,
thus proving the power social media maintains over the actions and decisions of
the Millennial generation. 
According to statistics and
conclusions explained previously, an argument can be made that social media is
influencing Millennial financial growth by indirectly encouraging them to spend
recklessly. Contradicting prior statistical conclusions that the Millennial
generation takes the financial planning lead when compared to other prior
generations, the Allianz Life Insurance Company reports that 63 percent of
Millennials consider themselves spenders, while 51 percent of Generation Xers
and only 36 percent of Baby Boomers would consider themselves spenders (Riley,
2018). The following statistics help support the argument that Millennial
financial growth is stunted by their exposure to social media. According to the
Allianz Life Insurance Company’s “Generations Ahead” study, 88 percent of
respondents believe social media creates more of a tendency to compare their
lifestyles and wealth to others. An additional 57 percent said they spend money
they had not yet budgeted for due to the influences from what they viewed on
social media (Riley, 2018). Kelash explains that, “Millennials are more
immersed in social media than past generations. Therefore, they could be swayed
more than other cohorts by social media and the temptation to spend beyond
their means. That could hurt them over the long term if they aren’t careful.”
According to a 2013 survey conducted
by Eventbrite, when it comes to money, Millennials value experiences over
material items. Eventbrite’s study found that the Millennial generation not
only values experiences, but is increasingly spending time and money on events
in an effort to live a meaningful, happy life. Through statistical evidence, it
can be concluded that happiness for the Millennial generation cannot be gained
through a lifetime of accumulated material possessions. Rather, a happy life is
determined by the ability to create, capture and share memories in an effort to
gain the recognition of social peers. Approximately 78 percent of Millennials
choose to spend money on desirable experiences or events, with 55 percent of
Millennials saying they are spending more on events and live experiences than
ever before (Eventbrite, 2013). Therefore, Millennials crave more experiences,
increasing the demand for real-life interactions. With the emphasis placed on
gathering experiences rather than material goods, Millennial spending is
significantly different when compared to the spending habits of generations
prior. More than 8 in 10 Millennial respondents, approximately 82 percent, said
they attended or participated in a variety of live experiences over the past
year, including parties, concerts, festivals, or themed sporting events
(Eventbrite, 2013). Further, 72 percent of these respondents even said they
would like to increase their spending on experiences rather than material items
over the next year, alluding to the idea that materialism will be replaced by
the demand for real-life experiences (Eventbrite, 2013). Millennials also
explained that these real-life experiences help shape their identity, holding
more social currency than physical items as these events create everlasting
memories. Almost 8 in 10, or 77 percent, of Millennials say their best memories
are from an event or live experience they attended or participated in
(Eventbrite, 2013). Interestingly enough, however, Millennials also explain
that capturing these events on photo sharing apps like Instagram and Snapchat
actually makes the experience more enjoyable. 60 percent of Millennials explain
that experiences are better shared through social media platforms (Eventbrite,
2013). 69 percent of respondents also explained that attending these live
experiences makes them feel more connected to other people, the community and
the world (Eventbrite, 2013). Therefore, just attending the live event does not
constitute the entire experience for Millennials. Millennials, instead,
finalize their overall opinion of an event based on their ability to share and
gain the approval of others via various social media platforms as research has
proven that Millennials tweet, share and post more about the events they attend
than any other generation.
One explanation for this necessity
to spend money on life experiences comes from Millennials’ constant feeling of
FOMO. Millennials are often critiqued for reckless spending and impulsive
purchases due to what they describe as FOMO, or the “Fear Of Missing Out” on a
situation (PR Newswire, 2016). Generated by the Millennial generation’s
creative social media vocabulary, FOMO is a state of social anxiety an
individual feels when peers or friends are enjoying activities without them,
and is often triggered by social media postings (Meyer, 2016). The Allianz Life
survey found that 55 percent of Millennials reported experiencing FOMO, while
another 61 percent felt inadequate about their own lives and what they have due
to the attention other users receive on social media recognized through “likes”
or “favorites” (Riley, 2018).
As previous statistics have proven,
portraying a successful adult life on social media heavily influences
Millennials’ decisions to spend recklessly. Millennials have been criticized
for diving headfirst into financial situations, assuming responsibilities
without proper financial support. Shannon Lee Simmons, a Toronto financial
planner for many Millennials, explains, “Those people with the new house on
Instagram? They’re miserable.” (PR Newswire, 2016). Being a Millennial herself,
Simmons understands the pressure to live an interesting life in order to be
deemed as attractive or intriguing on social media platforms. Simmons advises
her clients to prioritize debt repayment, live only within the boundaries their
paychecks allow, and continually put money into a savings account each month.
However, most Millennials are not honest with themselves about the cost of
living these extravagant, Instagram lifestyles. An online survey conducted by Go
Banking found that Millennials find it difficult to resist the urge to spend
recklessly, paying for social events by relying on credit cards, borrowing from
friends or family members, or sometimes even neglecting to pay bills.
Additionally, as a Millennial myself, I argue that because debt has become an
expected part of consumer spending and an innate aspect of the Millennials’
financial experience, Millennials are more likely to spend money they do not
have with the expectation of paying it off in the future. I believe this is
largely due to Millennial optimism, or the confidence Millennials feel
regarding many aspects of their personal lives – such as the confidence they
feel toward their expected success in their chosen career paths – and,
therefore, help to lower the stress surrounding debt accumulation. Because
Millennials have a tendency to impulsively spend, however, I make the argument
that financial optimism is categorized as wishful thinking, or a means of
resolving conflicts between reality and desire through pleasing imagination
instead of recognizing hard evidence and rationality, and remains financially
unsupported. The combination of reckless, social media-encouraged spending,
debt accumulation, and wishful thinking reveals the immature side of Millennial
spending, a side driven by the pressures to create and maintain an intriguing
image within the immense, extremely competitive social realm. Therefore, social
media has influenced the emotional spending of the Millennial generation,
bombarding them with information on what their friends and followers are doing
to such an extent that their prior understanding for the necessity to practice
conscious saving is pushed out of mind.
Further Discussion / Conclusion
Through the literature review’s analysis
of the background of Millennials’ financial self-esteem and potential reasons
why they resemble poor financial stature, it can be declared that the
Millennial generation suffers from a lifetime of financial experiences causing
predetermined feelings towards practicing frugal spending habits as a
requirement for future financial wellbeing. However, as the content analysis
provides expertise on how social media has influenced the way Millennials spend
their money, convincing them of the necessity to achieve substantial social
acceptance physically represented through their peers’ “likes” and “favorites,”
an argument can be made and support that emphasizes the hypothesis that social
media has negatively affected millennials financial reflection as attending
live events only increases their debt accumulated. Although millennials lived
through the Great Recession, have seen first-hand financial struggle, and are
drowning in student loan debt, the temptation to spend excessive amounts of
money on live experiences in order to have the opportunity to post on social
media clearly outweighs the necessity for moderate, conscious spending and
saving habits.
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