Save and Invest

Half of millennials say social media drives them to spend money they don't have

VIDEO2:3802:38
How to build wealth when you're drowning in debt

Your social media accounts are likely tempting you to spend money, according to a recent survey.

Just under half, 49%, of millennials (ages 23 to 38) say social media influenced them to spend money on experiences, according to Schwab's 2019 Modern Wealth survey. And 48% say they've overspent when sharing experiences with friends, whether it's dining out or going on a group vacation.

Social media sites increasingly have a huge impact on how we spend, says Farnoosh Torabi, personal finance author and host of the "So Money" podcast. Schwab partners with Torabi's Stacks House, a pop-up experience that promotes financial independence for women.

"We all spend time, so much time, on social media," Torabi tells CNBC Make It. "We tend to overspend because we see all the lifestyles on Instagram and Facebook."

It's not the first time that surveys have concluded that social media leads to spending. Last year, 57% of millennials reported making unplanned purchases because of what they saw on social media, according to a survey from Allianz Life Insurance.

"Millennials are feeling a lot of stress, and one of the things that are causing that is the influence of social media," Terri Kallsen, Schwab's executive vice president of investor services, tells CNBC Make It.

That's because a majority of millennials is paying more attention to how their friends spend than how they save. It can be easy to do: How many of your friends are posting about how big their savings account balance is this month versus how many are posting photos of their latest vacation or fancy dinner?

"Spending is not the enemy, but when we allow social pressure or other forces to lure us into spending beyond our means, it can impact long-term financial stability and become a larger problem," Kallsen says.

Spending is not the enemy, but when we allow social pressure or other forces to lure us into spending beyond our means, it can impact long-term financial stability and become a larger problem.
Terri Kallsen
executive vice president of investor services at Charles Schwab

In fact, a recent poll from Stash Financial found that two-thirds of millennials ages 23 to 34 say money is a major source of stress.

Avoiding social media temptations

The key to managing your spending while on social media is to keep your perspective "real," Torabi says. The things that you see on social media are not your life and may not reflect your values, she adds.

Many people may also be propping up their lives on social media. "People who exhibit a certain lifestyle on social media — you don't actually know what their bank accounts look like," Torabi says.

The other trick is to control your consumption of social media. "If you find yourself going down rabbit holes on Instagram, make sure you mute the accounts that are leaving you feeling less than," Torabi says. You can also follow accounts and hashtags like #financialfreedom and #moneymotivation that give you positive feelings.

"Soon your feed will be filled with things that can actually mobilize you to make healthier decisions as opposed to the feeds that make you feel like you'll never catch up," she says.

Don't miss: 29-year-old aims to cut her $16,000 credit card debt in half this year—here's the plan

Like this story? Subscribe to CNBC Make It on YouTube!

VIDEO1:4601:46
Money expert David Bach: Here’s how much you should have in your emergency fund
make it

Stay in the loop

Sign Up

About Us

Learn More

Follow Us

CNBC.COM