Is FOMO Hurting Your Financial Success Journey?
One minute you’re scrolling through your social media profiles in the comfort of your home, and the next, your notifications are blowing. A group of friends are taking an abrupt getaway because there’s a need for some excitement. And what do you know! You are busy jumping to pack your weekend getaway bag and using money you don’t have (or had not planned on using), just so you don’t get left out.
Congratulations! You have unlocked FOMO.
FOMO, Fear Of Missing Out is the feeling of anxiety or sadness we tend to have when something is happening and feel like we are ‘missing out’ by not being part of it. It doesn’t have to be a weekend away with your friends. It can range from feeling like people are having more fun and living better to engaging in unplanned investments because you want to feel the part.
And thanks to social media, it is now easier than ever to know what is happening where and when. I mean, every time you refresh any social media timeline, there’s always someone somewhere “eating life” (kula maisha) with a silver spoon.
Between FOMO and its sibling’s, YOLO (You Only Live Once) and keeping up with the Joneses, you could soon be brewing a recipe for disaster in your financial goals.
How FOMO Affects Your Financial Success
Whether we do it intentionally or not, some instances have us get sucked into the whole peer pressure stuff and do things that are not bettering our financial goals. We are not saying you should enjoy life and your money. By all means, go ahead and do it.
But, can you at least plan or budget for it? If you live beyond your means because of FOMO and get into debt, it hurts your financial success.
However, what you can do is incorporate all those things you love doing to make yourself feel better into your budget. Forget about what your friends and social media acquaintances are doing. For all you know, they are probably living beyond their means, too.
If it’s a weekend getaway, put something aside every month for it. Then, when it is time, take yourself and your family. You will have more fun and memorable moments without straining your pocket. Perhaps you want to meet up with friends every weekend to wind up. Have a budget allocated o how much you will send on drinks and food.
If you are constantly making purchase decisions from the fear of being left out, there is a high likelihood that your savings accounts will take a hit. Because rather than putting the few bucks away in a savings account for the future, the money goes into meeting unnecessary expenses that do nothing to further your financial success journey.
What happens is, when you have an emergency, you end getting deeper into debts because you don’t have an emergency fund.
So, anytime peer pressure creeps in, take a step back and think about the purchase you are about to make. Does it help you, or can you live without it, for now? If you feel left out, remind yourself that you can never afford everything all the time, no matter how much you want to.
When such moments come up, and you have extra coins in your pocket, put the money in a savings account. Then, you can always plan for that experience.
Related read: Debunking Investment Myths That Are Holding You Back
If there are no savings, you are probably not investing either. As mentioned on numerous occasions, investing is the only way to create wealth. While setting money aside for your savings account, this money is mostly not beating inflation and compounding in value. That’s where investing comes in.
Once you have enough savings and capital you will not need in a few months or years, start investing your money instead of succumbing to FOMO. For example, you can buy shares, invest in a mutual fund, and buy government securities. You can even start it right now by opening an individual retirement account or increasing contributions in your employer’s fund. That way, as you try to learn more about investing, you’ll still be setting something aside for your future.
The bottom line is that FOMO is a great impediment to financial success. While working on a budget and planning your finances are good solutions, overcoming FOMO will give you far better success. And this is not an easy thing to do. But once you can do it, other peoples extravagant experiences on social media will never rule your financial decisions.