The Problem With FOMO and Debt ReductionApr 24, 2015
Regularly appointed as the “most plugged in” generation, Millennials are connecting with people and businesses in a way that has never been experienced before. This means that constant bombardments of friends’ status updates and sponsored advertisements have become regularly consumed content when a Millennial opens up a laptop. There are certainly benefits to being plugged in and connected. However, FOMO (“fear of missing out”) has been receiving attention as a negative trend resulting from constantly receiving updates on activities and experiences that we are not experiencing. FOMO has been said to result in emotional responses such as disappointment and anxiety. An individual sees a friend’s Instagram or Facebook post of a live concert or a European vacation and we want to experience it too. It’s plain to see how FOMO could quickly affect personal finances. When your spending habits are influenced by an emotional response, there is a higher risk that you will spend over your limit and find yourself in debt. A key step in debt reduction is acknowledging your spending habits. Overcoming FOMO is more and more being acknowledged as a key step for Millennials to stay out of debt or reduce their debt.
FOMO and credit card debt
An article on Strategy Online reports “60% of millennial consumers said they make a reactive purchase after experiencing FOMO,” which is counter-intuitive for individuals who are trying to focus on debt reduction. Individuals are seeing social media posts from friends about the concert they attended last night and, even if they can’t afford it, the FOMO-afflicted individual will purchase their own concert ticket just to make sure they don’t miss out on that next experience. An opinion column by Shauna Rae on lfpress.com makes an interesting connection between the experience of FOMO and another recently popular hashtag, YOLO (“you only live once”). Rae claims that making purchases outside of your budget made sense when your excuse was that you need to make the most out of life while you are still living: “That meant going south for the winter, buying that dress that fit perfectly, or upgrading your phone — not really being able to afford it, but putting it on credit. Why? Well, because you might die tomorrow.” Yet, Rae continues to admit that she grew wise of this trend and its tendency to encourage financially irresponsible spending. A similar shift is now needed to encourage Millennials to talk about FOMO and curb the tendency to make reactive purchases after experiencing FOMO. This is the biggest and first step towards recognising their financial situation and working towards debt reduction.
Start talking your way to debt reduction
Whether it is student loan debts that have been put off while you were trying not to miss any life experiences, or it is credit card debt that was accumulated from impulse purchases after experiencing FOMO, your best first step to dealing with it is to talk about it. Open up to family and friends. You will most likely find that you’re not alone in your FOMO-induced spending. Consider speaking to a debt relief professional. There are a number debt options that are available to help you with debt reduction, and remember that being “plugged in” doesn’t mean that you have to keep up and compete with the status updates you’re seeing.