Social media driving economic insecurities

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Facebook and other social media outlets may be leading people to overspend in an effort to keep up with the perceived luxurious lifestyles of their friends—or even strangers. It’s the old problem of “keeping up with the Joneses” now on a global scale, since the Joneses are no longer just your next-door neighbors.

Financial expert Leonard Raskin, CEO of Raskin Global, says people can get caught up in chasing what amounts to an illusion.  “People are looking at others’ lives, that they know nothing about, they have no idea who these people are, or what their lives are,” he notes.  “And yet they feel that they’ve got to keep up with a whole new group of Joneses that are there on Facebook.”

Raskin says people can into a lot of economic trouble this way.  “It causes cash problems, it can cause credit problems,” he observes, “and before you know it you owe for something—you either went to a phenomenal dinner, a great show that you couldn’t afford to see, or a great vacation that you shouldn’t have taken.”

Raskin says to bear in mind that a lot of what you see of other people’s lives is exaggerated and may be a put-on.  “When you look at social media, what most people post is their best self,” he points out.  “What you see is their greatest look, their finest clothes, their fabulous vacations, their newest things.”  What you don’t see is their bottom line, and it may be in the red.

Raskin has some advice on how to avoid the temptation to outdo others.  “You’ve got to budget.  You’ve got to know what you’re going to spend money on,” he says.  “You’ve got to take your ego and your envy out of social media.”  He says to save up enough money to get you through an emergency, then give yourself permission to splurge a bit.

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