By Ryan Velez
Ever look to your wallet and get misty-eyed? Sometimes, even your best plans to save fall short. According to Black Enterprise, social media may be undermining your attempts to save money by spending more.
According to Gallup, 30% of consumers admit that social media influences their buying decisions. That number is even higher for millennials, at 43%. And a Deloitte survey shows that almost half of millennials use social media as part of their shopping process—and those who do are four times more likely to spend more than they’d planned. The relationship may be a bit deeper than we think. An AARP study shows that those who spend more time on social networks are likely to have more credit card debt and lower credit scores.
For this reason, Prudential named social media as one of the biggest reasons to make a budget. “Budgeting is especially important for younger adults, because it can help them establish a mindset and discipline that can last a lifetime,” states the paper. “In addition, budgeting can help younger adults to start saving early, which makes a significant impact on outcomes.”
“Conversely, the absence of good budgeting in the early working years may lead to financial shortfalls that can derail an individuals’ ability to save adequately for retirement and protect themselves against unexpected life events.” However, most Americans fall short in this area. More than 60% of Americans don’t have enough savings to cover a $500 emergency. And Prudential’s research shows that 25% of employees spend their entire paycheck. There are other trends that play into this as well, like a cashless society that creates a disconnect between the money you have and what you think you have. In addition, more contract, temp, and part-time work are hurting people’s incomes, and major expenses like college and home ownership are rising at a rate that people can’t match.
Personal responsibility is important, but employers can do their part to help as well. This includes providing:
• Financial wellness education—either in the office or online
• Budgeting tools that can be personalized and tracked
• Self-assessment tools that allow employees to determine their financial weaknesses
• Solutions that encourage saving, such as student loan repayment programs and employer-matched contribution plans.