Menu #53: How comparison impacts your wallet

STATS STACK 🥞

$100 million pay packages disappeared from CEO compensation in 2024 for the first time in a decade, even as overall executive pay continued to rise. Starbucks’ Brian Niccol and GE’s Larry Culp came closest, earning $95.8 million and $89 million respectively, mostly through performance-based stock awards.(Source: WSJ)

$5.01 is what the Tooth Fairy’s leaving under pillows these days—a bit lighter than last year, with a 14% drop in generosity. She's still come a long way since 1998, when a lost tooth earned just $1.30…talk about fairy-sized inflation! Turns out, her payouts often flutter in step with the economy—when times are tight, even magical budgets feel the squeeze. 🧚‍♀️✨ (Source: Delta Dentals)

38 is now the median age of first-time homebuyers in the U.S., a steep climb from 28 in 1991, reflecting how affordability challenges and shifting life milestones are reshaping the path to homeownership. With older generations staying in homes longer and younger buyers facing financial hurdles, the dream of owning a first home is arriving later than ever. (Source: ResiClub)

DEEP DISH 🍕

How comparison impacts your wallet

We’ve all been there—scrolling through social media, seeing someone’s picture-perfect vacation, designer wardrobe, or sparkling new car… It’s harmless, right? Just a quick peek into someone else’s highlight reel. But what if those aspirational posts were quietly influencing how you spend your money?

Social media has changed how we connect, share, and aspire, but it’s also created a subtle pressure to keep up, to spend more, and to live a life that looks just as shiny and polished as what we see online. Today, let’s dive into the hidden costs of social media, how it impacts your financial decisions, and how to break free from the comparison trap while staying confident in your financial journey.

How Social Media Fuels Spending

1. The Comparison Trap

   Social media is a curated version of reality. Most people only post their wins—the lavish vacations, new cars, and perfectly decorated homes—not the struggles, debt, or sacrifices that made those moments possible. When you compare your everyday life to someone else’s highlights, it’s easy to feel like you’re falling behind, even if you’re doing just fine.

   This feeling of inadequacy can lead to reactive spending. You might buy the newest gadget, splurge on a luxury handbag, or upgrade your car—not because you need it, but because you feel the need to “catch up.”

2. Aspirational Marketing

   Social media is also a powerful marketing tool. Influencers and ads seamlessly blend with regular posts, making it hard to distinguish between authentic recommendations and paid promotions. That skincare product your favorite influencer swears by? It might just be part of a brand deal.

   The result? You’re exposed to a constant stream of aspirational content designed to make you feel like spending is the only way to achieve a similar lifestyle.

3. FOMO (Fear of Missing Out)

   Events, sales, and trends gain momentum on social media. Seeing friends at a sold-out concert or photos of limited-edition clothing can trigger FOMO, prompting you to spend impulsively just to feel included.

The Financial Toll of Social Media-Driven Spending

1. Unplanned Expenses Add Up

   The quick decision to “add to cart” after seeing a glowing review or to book that trip after watching someone’s travel reel can derail your budget. These impulse buys often don’t align with your financial goals.

2. Debt and Stress

   Keeping up with social media-inspired lifestyles can lead to overspending and even debt. The stress of maintaining appearances might start to weigh on your mental health and financial stability.

3. Missed Opportunities for Growth

   Every dollar spent on comparison-driven purchases is a dollar that could have gone toward investments, debt repayment, or savings. Over time, these small decisions compound, impacting your long-term financial health.

How to Stay Financially Independent and Confident

Breaking free from the social media comparison trap doesn’t mean you have to delete your accounts. It’s about shifting your mindset and setting boundaries. Here’s how:

1. Practice Mindful Scrolling

• Ask yourself: Is this post inspiring or triggering me?

• Follow accounts that align with your values and unfollow those that make you feel inadequate or pressured to spend.

2. Set Clear Financial Goals

• When you’re clear about your financial priorities, it’s easier to resist spending on things that don’t align with your goals.

• For example, if you’re saving for a home or a dream vacation, remind yourself of that goal when tempted by a flashy purchase.

3. Remember the Reality Behind the Posts

• Everyone’s highlight reel hides the struggles and sacrifices behind the scenes. That person with the luxury vacation might also have credit card debt or a stressful job. Focus on your own journey instead of comparing.

4. Create Your Own Definition of Success

• Success isn’t about keeping up with others; it’s about building a life that feels fulfilling and aligned with your values.

• Define what financial independence and happiness mean to you, and let that guide your decisions.

5. Limit Your Exposure

• Set boundaries for social media use. For instance, avoid scrolling first thing in the morning or before bed.

• Use apps that track and limit your time on social platforms to prevent overexposure to aspirational content.

6. Celebrate Your Wins

• Reflect on your financial progress and celebrate milestones, no matter how small. Recognizing your achievements helps build confidence in your own journey.

Shifting the Narrative

Social media doesn’t have to be a source of pressure or comparison. It can be a tool for inspiration, learning, and connection if used intentionally. Instead of letting it dictate your spending habits, focus on creating a narrative that supports your financial goals and personal growth.

Final Thoughts

Social media is a powerful force, but it doesn’t have to control your wallet or your self-worth. By understanding its influence and setting boundaries, you can enjoy the positives of social media without falling into the comparison trap.

This week, take a moment to reflect on your social media habits. Are there accounts or trends that pressure you to spend unnecessarily? If so, consider curating your feed to support your goals and values instead of working against them.

Remember, your financial journey is unique, and it’s about building a life that brings you joy, not one that simply looks good online. Here’s to making intentional choices and thriving both on and off the screen.

SWEET LINKS 🍰
Digital bites we think you’ll like

Buying the dip — People have been "buying the dip" for as long as financial markets have existed. It simply means taking advantage of short-term price drops by buying at a lower cost. But not all dips are the same. A pullback is a small drop of 5–10%, while a correction is a larger decline of 10–20%. A bear market is when prices fall more than 20%, and a crash is a sudden, steep drop usually driven by panic (e.g., 2008-2009 market crash, COVID crash etc.) .

Loans past due —After a three-year pause during COVID, student loan payments resumed in 2023—but many borrowers are already struggling to keep up. According to the New York Fed, about 9.7 million people have fallen behind, adding up to roughly $250 billion in overdue payments. The ripple effects go beyond individual budgets: missed payments can damage credit scores, reduce overall spending, and may be a warning sign of a slowing economy.

23andMe files for bankruptcy — 23andMe was great at mapping DNA, but it struggled to build a business that could last. Most customers only need their DNA analyzed once, and the company failed to find new ways to keep generating revenue. Now, as it faces bankruptcy, California’s attorney general is urging people to delete their data—because around 15 million DNA samples could be at risk of being sold off during the process.