Although social media offers wonderful benefits, such as the ability to connect us with people we can’t be physically near, using online platforms can also have negative repercussions. Despite the potential to build and foster relationships, social media use can increase feelings of jealousy, insecurity and isolation — which often lead to overspending or feeling like your financial life isn’t up to par with your peers.

However, the same social media platforms can enrich your life, help you find community, and lead to saving and more meaningful spending. It’s all about how you use them.

How Social Media Can Lead to Increased Spending

While social media platforms are often free, using social media can be costly in straightforward and subtle ways:

  • You’ll be targeted with ads: The most straightforward way social media use can lead to overspending is through targeted ads. Marketers can target users based on specific criteria, and retarget you so that you’ll repeatedly be exposed to the ads. Social media platforms have gained so much momentum, in part, because targeted ads lead users to spend money.
  • There’s a disconnected buying experience: Making a purchase online can also be easier psychologically than making a purchase in person. When you have to hand over cash, you may feel the pain of losing money. The sense of loss is diminished when you pay with a card, even more so if you’ve saved your payment information online or linked it to your account with in-app experiences.
  • Others’ posts add social pressures: Whether it’s a picturesque vacation or a new outfit, many people share the highlights of their lives on social media. Scrolling through these posts can foster feelings of insecurity or jealousy, and you may be compelled to spend money to feel better about your own life.

You may experience these effects in different ways, or go through periods where you become particularly interested in a topic or influencer and start spending more money. You want to be mindful of when and why you’re making a purchase, and ensure it’s in line with your budget.

Social Media and Mental Health — Finding a Balance

Using social media as an escape can also do more harm than good. Overspending might be one result, but it could also exacerbate feelings of loneliness or lead you to compare your situation to others — forgetting that others may be curating and posting the most exciting parts of their days. It’s somewhat cyclical as people are also more prone to spend money when they’re bored or sad, which can be associated with passively scrolling through social media feeds.

Social media usage isn’t inherently bad, though. Researchers at Harvard found that even routine use can have positive health-related outcomes if you’re thoughtfully responding (not just scrolling and hitting like) to content others share.[1] However, logging in because you’re scared of missing out or feeling disconnected whenever you’re not on social media can have the opposite effect.

Overall, try to:

  • Use social media as a tool to connect with, rather than observe, others.
  • Be mindful of how often and why you’re logging into your accounts.
  • Remember that posts don’t reveal the full picture of what’s happening in others’ lives.
  • Prioritize in-person interactions when you can.

You could also try to occasionally take a social media detox, which could range from setting aside specific hours as social-media-free times to logging off for several days or weeks.

Using Social Media to Strengthen Your Personal Finances

In many ways, using social media to improve your financial health mirrors how you’ll want to use it to improve your mental health. Forming and building meaningful connections is critical.

You could do both simultaneously by looking for inspiration from communities online, such as the financial independence groups where people discuss ways to make, save, and invest their money. These groups tend to be filled with open and honest discussions about finances, the good and the bad, and members are eager to welcome new people and share tips with one another.

The connections don’t have to be financially focused for you to benefit, either. Perhaps you connect with others who have shared interests, hobbies, or goals. This can lead to insights into which products to invest in — saving you money in the long run — while you build new connections.

If you want to learn more, visit PNC Insights for more information on things like safeguarding your finances to how the latest laws can impact your investments.