The only thing worse than being a broke millennial is feeling like all your friends have way more cash — and way cooler lives — than you. Thanks to Facebook, Instagram and even Venmo, your friends' trips, new cars, barhopping and various forms of conspicuous consumption are constantly in your face: or at least on your screen.
That's dangerous because social media can make it harder to save money, pay down debt and more. Constant updates on other happy lives has taken "keeping up with the Joneses" to new levels and could risk your financial future, especially if you feel tempted to overdo it on credit card purchases to help produce swoon-worthy Insta posts — or simply to live your #bestlife.
Need help cutting out wasteful purchases? Start by auditing your social life: Here are 3 ways to make sure your BFFs don't break your budget.
1. Invitations you "can't" refuse
You probably have at least one friend who is constantly inviting you to hit up the bars, see a concert or jet off on a weekend trip. That's a fun friend to have — so long as you don't feel pressure to always say yes.
“Just because your friends can afford to go out several nights a week and spend hundreds of dollars on entertainment and dining out, it certainly doesn’t always mean you can,” Seattle Financial Advisor Josh Brein told Forbes.
This doesn't mean you never see the person — or group. It just behooves you to pick and choose when you do attend events.
To make sure a good nightlife doesn't lead to big bills you can't pay, make a conscious decision about how much money — in total — you want to spend on a given activity. If you don't want to make a detailed budget, use a shortcut like the 50/30/20 rule, which says you should spend 50% of income on needs; 20% on savings and debt repayments and 30% on "wants." If you're meeting the 50/20 goals for essentials and saving, you can spend that 30% on fun stuff.
Once you hit your spending limit? Don't be afraid to say "no" once in awhile, at least until next pay period.
2. The siren call of Facebook and Instagram
Sharing perfectly-filtered photos and artfully-worded announcements is practically a requirement these days. "Sharing itself becomes personhood, with activities taking on meaning not for their basic content but for the way they are turned into content, disseminated through the digital network, and responded to," the Guardian writes of the Instagram era.
All those cool pics create a self-perpetuating cycle. Two in three millennials say social media makes them compare peers' lifestyles — and spending — to their own, according to a TD survey. After all, you don't want to be the only one without pictures from vacation in Paris or Snaps of your gorgeous "adult" apartment, even if you'd be better off financially with a staycation or roommate.
What can you do to stop this cycle? Recognize it's happening — and remind yourself social media is just a highly-curated window into people's lives, not the whole picture. You don't see the credit card bills.
Instead of gazing at Instagram posts of your most spendthrift friends, "change your reference points to friends who are responsible savers and modest spenders,” Jodi DiCenzo, a partner at Behavioral Research Consulting, told USA Today. If you must travel, start saving up some cash and look for smart holiday vacation values: think deals and discounts. Then you can actually start spending once you've actually set aside money for exploring.
3. Shopping dates "just to catch up"
Yes, sure, you haven't seen your fashionable bestie Taylor in way too long, but is it really a good idea to schedule catch-up time while browsing for a new jacket? Shopping with big spenders can mess with your finances: In fact, 64% of adults surveyed in a 2015 study said they spent more money when shopping with friends, the New York Daily News reported.
Both the desire to show off to friends and the tendency to give into peer pressure explain why we spend more when we shop with others. Many friends are also enablers, encouraging you to buy something because it looks cute even if you don't need it.
Instead of hitting the mall with shopaholic friends, suggest a different activity, like attending a free concert or having a drinks-and-games night at home. Chances are, a few of your friends are probably broke — even if they don't talk about it — and some might be glad to save money, too.
Finally, if you really need advice on a purchase, try shop with a frugal friend instead — or at least bring around that buddy to play bad cop when Taylor starts gushing about how "amazing" you look in that overpriced shirt.
Your budget will thank you.
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