We all face a world of constant FOMO: we scroll endlessly through social media and worry that we’re missing out on the exciting life our friends seem to be living. But unbeknownst to most of us, FOMO stretches far beyond the realms of feeling left out and becoming enmeshed in the bragbook lives of others; it actually has a tangible impact on our financial decisions. In this article, we explore how the Fear of Missing Out affects how we manage our finances.
1. The Unsettling Shadows of FOMO: How Social Pressure Compromises Our Financial Choices
The fear of missing out (FOMO) is an ironic condition of modern times. When it comes to making decisions about money, our anxiety about what others do and why they do it often lead us away from sound financial choices. As our FOMO leads us to decisions that make few cents – if any – in the long run.
Today, more than ever, valuable words of financial wisdom are drowned out in an ocean of alternative views. If we are to protect our financial future, we must be mindful of how FOMO creeps into the background of our decisions.
First, relying too much on the information or advice of others to make our own financial decisions can leave us vulnerable to the opinions of others as well as their agendas. Furthermore, while it’s good to take wise advice, such advice should never usurp our own judgment. There is no one-size-fits-all financial decision – what works for one may not work for everyone.
Second, our emotional drive to “keep up with the Joneses” can lead us to make financial decisions that we don’t truly need or benefit from. We’re subconsciously driven to keep up with the lifestyle and standard of living that we see around us, even if such a standard of living is beyond our reach. A financial decision that fits another might not be the one that makes the most sense for us, either.
- Avoid glamorous marketing campaigns and get-rich-quick schemes that take advantage of our insecurities.
- Resist taking out loans, such as payday loans, to keep up with urban trends.
- Take advice from a trusted source – be it a family member, a financial adviser, or your inner voice.
Finally, FOMO can lead us to make irrational financial commitments in moments of desperation. For instance, we may use our credit cards to treat ourselves or our loved ones to items far beyond our means, sink our savings into gambling dens, or join speculative investments that promise quick returns. However, desperation is blind and often motivates us to decisions that throw our finances into tailspins or cost us more in the long run than we ever imagined.
2. Exploring the Invisible Curse: FOMO’s Sneaky Influence on our Money Decisions
We all want a good life, one that entails peace, plenty, and a comfortable place for dwelling. But as the old saying goes, be careful what you wish for; because the same pursuit of life’s comforts can lead to something dark and insidious. What began as a friendly nickname – ‘fear of missing out’ – is now known among mental healthcare professionals as ‘FOMO’.
FOMO is a fear-based behavioural disorder, where one can become saddened and frustrated by their perceived lack of inclusion in social situations. As FOMO takes its toll, it can push us to irrational and unsustainable money decisions. To make very clear, this is an issue that can and does affect everyone.
One financial decision that may be driven by FOMO is the desire to keep up with the Joneses. People who suffer from FOMO might be tempted to make luxurious purchases to restyle their home, buy trendier wardrobe, or adopt expensive hobbies, with the intention of not only getting what everyone else has, but of surpassing them.
The debt cycle is also perpetuated by FOMO – particularly if the money comes from a loan or credit card. The need to fit in, socially, become able to pay for mass-consumption goods or vacations, can push us past our normal fiscal boundaries. As a result, we end up in debt, the very payment of which can cause further FOMO within the wallet.
The Inability To Mindfully Save
- Whether we’re spending above our means or trying to be “better” than our friends, FOMO can have a big impact on our ability to save for long-term goals.
- Our budgets become quickly drained by wants, not needs, and it becomes increasingly harder to break the “saving nothing” pattern.
- Saving money takes a little time and a lot of discipline, but there are plenty of ways to help us stay on track – from small, immediate measures (such as using cash) to long-term strategies (including financial education and increasing the frequency of savings).
Changes That Make A Difference
- We must combat against our impulses and realise that there’s no substitute for good financial planning and living within our means.
- It may be hard to break free from the invisible chains of FOMO, but recognizing its power in our life and developing healthy coping strategies is key to maintaining a healthy and joyful financial life.
- The primary change needed is a shift in mindset and attitudes towards money; one that recognizes its worth and sees it as a vehicle towards long-term financial success. Not just as a brief stopgap to avoid feeling left out.
It’s not an easy task, but the potential reward of real, long-lasting financial stability is worth the effort. One of the most important steps to resist FOMO is to focus on our values and financial goals. Acknowledging and understanding this invisible curse is a powerful first step to overcoming the financial stress it creates.
3. The FOMO Epidemic: Unmasking the Distorted Lens That Shapes our Financial Future
We live in a world full of false appearances. We are used to seeing people on magazine covers and Instagram feeds who seem to have it all—beautiful homes, designer clothes, luxury cars. But what these images don’t show is the debt that many of these people have taken on to keep up with each other’s lifestyles.
What is FOMO? FOMO, or the “fear of missing out,” is a phenomenon in which people buy things they cannot afford in order to stay on trend or even to compete with their peers. This anxiety is driven by an obsession with keeping up with the latest technology, fashions, lifestyles, and financial goals. People often make irrational decisions due to the pressure of following the herd, in hopes of looking successful, or worse yet, avoiding a scenario where they appear unable.
Unfortunately, the FOMO epidemic is not an isolated problem. This distorted lens of thinking is often reflected in our attitudes towards financial decisions as well. The need to appear successful often outweighs common sense, leading us to make impulsive spending decisions, rather than thinking long-term and making decisions that could bolster our financial security in the future.
Rather than splurging on the latest trends or luxuries, we need to start looking at our finances through the lens of financial literacy. Learning basic financial concepts and principles can help us navigate the emotional biases that fuel the FOMO epidemic.
- Researching potential investment options
- Creating a budget and sticking to it
- Researching different types of savings accounts and retirement plans
- Using credit cards responsibly
Talking to a financial advisor is also a great way to make better informed financial decisions. An advisor can help you evaluate your goals and plan for the future, as well as give you advice on your financial decisions. Lastly, simply being aware of the FOMO epidemic is the first step to combating it.
4. Dollars or Experience? The Perplexing Dilemma of FOMO and Its Peculiar Hold on Financial Choices
The perplexing dilemma of FOMO and its peculiar hold of financial choices is one that will never be answered with a single correct answer. It is one that is played out in a myriad of ways by many different types of people, and the only universal truth is that nobody has the right answer.
When it comes to financial choices, FOMO often rears its head in the form of a decision to spend money rather than experience something. The inner voice of FOMO pushes us to worry that we’re missing out, that the rest of the world is living in the lap of luxury and we are missing out on the best of life.
Yet, no matter how loudly the voice of FOMO may call, the truth is that spending money on experiences carries its own set of rewards. There can be no denying the sense of satisfaction that comes from seeing the world, meeting new people, and taking part in events and cultures that you wouldn’t otherwise have access to. And, in the long run, this can be just as financially rewarding as investing in a new possession.
The answer to the FOMO-fueled dilemma, then, is to be mindful when considering financial decisions. On the one hand, consider the immediate benefits of investing in possessions, but on the other, don’t entirely discount experiences either. The benefits of both can be immense.
Here are five tips on how to balance dollars and experience:
- Know your financial capabilities and stick to them
- Ensure that whatever you spend money on is actually worth it
- Weigh the initial cost of an experience and long-term returns
- Realise that experiences always come with (at least) one reward
- Don’t be afraid to do different things, even on a tight budget
By following this advice, it is possible to make the most out of the opportunity FOMO can provide. We may never be able to free ourselves of the recurring urge to keep up with the latest trends, but we can certainly strike a better balance between gaining dollars and gaining experiences.
FOMO can be a powerful incentive, motivating us to make decisions that are rational in some respects but, due to psychological biases, irrational in their results. Understanding how it works can help us to make better decisions with our finances and to live according to our goals rather than our fears.