Is Social Media Draining Your Wallet? Experts Explain How to Escape the ‘Money FOMO’ Trap

Scrolling through social media today often feels like flipping through a glossy lifestyle magazine — exotic vacations, luxury cars, designer outfits, and high-end gadgets flood our feeds. While these posts might seem harmless, experts warn that this culture of constant comparison is silently robbing many of us of our financial stability. Behind the filters and hashtags lies a dangerous trend known as ‘Money FOMO’ (Fear of Missing Out on Money) — a psychological trap that pushes people to spend more than they can afford.

According to recent data, India has over 690 million social media users, nearly half the country’s population. Every scroll exposes users to influencers flaunting luxury products, ‘haul videos’ showcasing expensive shopping sprees, and glamorous lifestyles that can create a sense of inadequacy. Financial experts say this constant exposure has blurred the line between ‘need’ and ‘want’, leading to impulsive spending and shrinking savings.

The Rise of ‘Money FOMO’

‘Money FOMO’ refers to the fear that others are earning, spending, or living better lives than you. This anxiety pushes individuals to make unnecessary purchases just to feel included in a trend. Payment solutions company Plutos ONE’s Managing Director, Rohit Mahajan, calls this phenomenon “lifestyle inflation” — the idea that people keep upgrading their lifestyle not because they need to, but because social media convinces them they should.

He explains, “The endless cycle of comparison has erased the boundary between necessity and desire. Most influencer content is sponsored or involves products bought on credit, yet viewers assume it reflects genuine prosperity.” This, he adds, is not just lifestyle inflation — it’s digital peer pressure.

How Algorithms Trap You

Social media platforms are powered by algorithms designed to keep users emotionally hooked. They amplify feelings of envy, excitement, and FOMO by showing you content that makes you feel left out. Combined with one-click checkouts, mobile payments, and Buy Now Pay Later (BNPL) options, users are subtly nudged to make impulse purchases.

While BNPL schemes appear convenient, experts caution that they are essentially short-term loans. Missing a payment can lead to heavy late fees and damage to your credit score. Fintech data shows a 30% rise in BNPL usage among millennials, largely fueled by social media’s obsession with luxury goods and unboxing content.

The Truth Behind ‘Haul Videos’

‘Haul videos’ — where creators show off their latest purchases — have become a viral genre on platforms like YouTube and Instagram. From designer handbags to new gadgets, these videos make spending look aspirational. But what many viewers don’t realize is that a large portion of this content is staged or sponsored. Some creators display products loaned by brands or purchased on credit just for the sake of views.

This illusion of constant consumption pressures ordinary users to keep up, reinforcing the “everyone is buying” mindset — the core fuel of Money FOMO.

How Subtle Peer Pressure Shapes Spending

Unlike traditional peer pressure, digital peer pressure works quietly. A single reel of a friend dining at a fancy café or buying a trending smartphone can trigger instant desire. You may not notice it, but these tiny decisions — repeated over time — reshape spending habits and push you toward living beyond your means.

A 2024 YouGov survey found that 64% of millennials and Gen Z users admitted to making unplanned purchases after seeing something on social media. Even more striking, 93% of shoppers said they were influenced by online trends, while 84% completed their purchases directly through social media platforms. The result? Soaring credit card bills, shrinking savings, and rising financial anxiety.

Expert Tips to Break the Cycle

Experts suggest adopting practical strategies to regain control over your finances.

• Follow the 72-hour rule: Before making any non-essential purchase, wait for three days. Often, the urge to buy fades once the initial excitement passes.

• Track expenses regularly: Rupyaa Paisa Director Mukesh Pandey advises setting a clear monthly budget and savings goal. Monitoring your expenses keeps impulsive decisions in check.

• Reset your feed: Unfollow accounts that promote excessive spending. Instead, follow pages focused on minimalism, financial literacy, and mindful living to realign your mindset toward sustainable habits.

Real Wealth Lies in Balance

Social media should inspire, not influence your wallet. Buying a trending phone or luxury item doesn’t define success — financial discipline does. Ask yourself simple questions before any purchase: Do I need this, or do I just want it because it’s trending? Can I afford it comfortably without touching my savings?

True success isn’t about flaunting expensive products but mastering the art of spending wisely and living within your means. The next time your feed tempts you with a shiny new gadget or luxury outfit, remember — real style isn’t about showing off, it’s about staying smart.