Yahoo Finance The Fear of Missing Out: How It Shapes Your Saving Habits
You’ve likely seen the term floating around social media in memes and reels — FOMO is something many are intimately familiar with whenever someone posts photos of their latest luxury vacation, their late-night get togethers or their 5 star restaurant meals.
To put it simply, FOMO, or fear of missing out, is a psychological phenomenon that creeps in when we worry about others having more fun than us.
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“It’s exemplified by an all-consuming fear that everyone else is having an amazing time while we sit alone and bored,” said Dr. Clifford Feldman, board-certified psychiatrist and medical director at Solace Treatment Center. “The rise of social media has done nothing but make it worse; now, everyone’s highlight reel is front and center for us to feel inadequate about.”
According to Dr. Felman, FOMO can contribute to stress, anxiety, depression and general unhappiness. “Constantly comparing yourself to others and finding yourself lacking is a recipe for self-esteem issues, not to mention full-blown mental illness.”
On top of just feeling plain bad, according to experts, it can also significantly impact your personal finances. Here’s how it shapes your savings habits and how you can combat its negative effects.
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Keeping Up With Peers Costs You Big
“The desire to keep up with peers can lead to excessive spending on experiences, gadgets or lifestyle upgrades, often driven by the need to emulate the perceived success and satisfaction of others,” Dr. Feldman explained.
He said this can divert funds from savings or investments, potentially compromising your financial security and future goals. “For instance, an individual might opt for an expensive vacation, not because they particularly desire it, but because they fear missing out on the shared experience that their peers are posting about online.”
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FOMO Leads to Overspending
“As someone deeply immersed in guiding individuals through their financial journeys, I’ve witnessed firsthand the profound impact of the FOMO on people’s saving habits,” said Alyssa Huff, real estate expert and owner of Sell House As Is. “It’s like this constant tug-of-war between the desire to enjoy life now and the need to secure our financial future.”
“Picture this: You’re scrolling through social media, and suddenly, you see your friends traveling to exotic destinations or splurging on the latest gadgets,” she explained. “It’s natural to feel a twinge of envy and a sense of urgency to join in. But what many don’t realize is that behind those flashy posts lies a complex emotional battle.”
Huff explained that FOMO is about comparing yourself to your own dreams and aspirations as much as it is comparing yourself to others.
“It’s that nagging feeling that we’re somehow missing out on our own potential experiences and possibilities,” she added. “And in today’s world of abundance, where choices are endless and opportunities seem infinite, it’s easy to fall into the trap of overspending in pursuit of fleeting pleasures and validation.”
Combat FOMO By Taking a More Mindful Approach to Money
“But here’s the thing, acknowledging FOMO is the first step towards regaining control over our financial lives,” said Huff.
She said that by understanding the emotional triggers behind our spending habits and adopting a more mindful approach to money, we can make intentional decisions that align with our long term goals and values. “It’s about finding that balance between living in the moment and planning for the future, without letting FOMO dictate our financial decisions.”
Adopt a Holistic Approach
Jonathan Rosenfeld, founder and managing attorney at Rosenfeld Injury Lawyers, agreed that countering FOMO gives way to gratitude. “You’ll be happier by focusing on your current life situation instead of what you’re missing out on from others’ lives.”
The first step, he argued, is to define your financial priorities.
“Take the time to establish clear financial goals, whether it’s saving for emergencies, retirement or other milestones,” Rosenfeld explained. “Having a roadmap helps in steering clear of impulsive spending driven by FOMO.”
Once you’ve done the above, he suggested crafting a budget “that reflects your income, expenses and savings targets. By assigning a portion of your income to savings and essentials, you can resist the urge to overspend due to FOMO.”
After applying the above, Rosenfeld said to practice conscious spending: “Before making a purchase, pause and consider its alignment with your financial goals and values. Reflecting on the long-term consequences of each expenditure can mitigate FOMO-induced impulses.”
Finally, he advocated for celebrating your personal progress.
“Shift the focus from comparing yourself to others to celebrating your own financial achievements,” Rosenfeld noted. “Small victories, such as consistently saving or paying off debt, deserve recognition and serve as motivation to stay on track.”
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