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Survey: Social media makes nearly half of Gen Z and millennials feel negatively about their finances

Illustration of young social media users on phones on a park bench
Photo by Getty Images; Illustration by Bankrate
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Social media has long been lambasted for making users feel poorly about their accomplishments or lifestyles. Turns out, it can make people feel bad about their money, too.

More than 1 in 3 U.S. adults who have social media (34 percent) say they have felt negatively about their finances after seeing others’ posts, according to a new Bankrate poll. Those feelings included jealousy, inadequacy, anxiety, shame and anger.

Even more striking, social media tends to make users feel negatively about their wallets more than any other aspect of their lives, from their appearances (32 percent) and careers (27 percent) to their living situations (26 percent), personal relationships (25 percent) and hobbies (17 percent), according to a new Bankrate poll.

But there’s clear evidence of who social media influences most: younger generations. Having grown up with social media or watched social media grow up with them, nearly half of Generation Z and millennials (or 47 percent for those between the ages of 18 and 25, along with 46 percent for individuals between the ages of 26 and 41) say they’ve felt negatively about their finances from spending time on social platforms, Bankrate’s report also found.

That compares with nearly a third of Gen X (31 percent for those between 42 and 57) and more than a fifth of baby boomers (22 percent for those between the ages of 58 and 76).

“Social media distorts reality in the sense that people put their best foot forward and sometimes portray unrealistic versions of themselves,” says Ted Rossman, Bankrate credit card senior industry analyst. “You don’t know if someone took on a lot of debt to fund the amazing vacation or the perfectly put together outfit depicted in their photos. This can lead to a ‘keeping up with the Joneses’ kind of competition among friends and acquaintances.”

Key takeaways:

Social media makes nearly half of Gen Z and millennials feel negatively about their finances

Money isn’t the only aspect millennials and Gen Z feel poorly about after seeing others’ posts on social media. Social platforms make 49 percent of Gen Z feel negatively about their appearances, the most of any category, along with their careers and professional successes (41 percent), their personal relationships (40 percent) and their home or living situations (40 percent).

For millennials, however, the top spot remained money. More than 2 in 5 (44 percent) also said social media made them feel poorly about their appearances, along with their careers (40 percent), home or living situations (38 percent) and their personal relationships (35 percent).

Overall, social media negatively affected 84 percent of Gen Z and 77 percent of millennials in some way, compared with 55 percent of Gen X and 38 percent of baby boomers.

Other divides were also clear. Nearly 3 in 5 women (61 percent) say social media negatively impacted their lives in some way, compared with 56 percent of men. Women’s perceptions of their appearances were most impacted, at 39 percent, followed by their finances (36 percent), their living situations (29 percent), their personal relationships (28 percent) and their careers (27 percent).

Social media, however, was more likely to make men feel negatively about money (at 32 percent), followed by their careers (26 percent), their appearances (25 percent), their living situations (24 percent) and their personal relationships (22 percent).

Lower-income individuals were also more likely to say social media negatively impacted their feelings about money, at 38 percent of those making less than $40,000 a year, compared with 35 percent of those who make between $40,000 and $79,999 a year and 30 percent of those who make $80,000 or more.

More than 3 in 5 parents with children under 18 who are on social media say it’s created unrealistic expectations about money

Parents indicate their children are also learning inaccurate financial lessons from social media, putting them at risk of being negatively impacted, Bankrate’s poll found.

More than 3 in 5 parents with children under 18 who have access to social media (64 percent) believe social platforms have given their kids unrealistic expectations about money. That total includes 31 percent who strongly agree.

“Unfortunately, most people don’t get a lot of personal finance education at school or at home,” Rossman says. “Kids and young adults can be especially vulnerable because they’re impressionable and don’t have as much life experience. They may feel that they can trust a certain friend or influencer and they don’t realize that the advice they’re giving may not be the best approach.”

Nearly half of social media users have made an impulse purchase of a product they saw on social media

Those negative perceptions about money can often lead to impulse purchases, Bankrate’s poll suggests — and more often than not, Americans have regretted them.

Nearly half (49 percent) of social media users have made an impulse purchase of a product they saw on social media. Yet, about two-thirds of those individuals (or 64 percent) said they regretted at least one of them.

When it comes to those whom social media is swaying, younger social media users are more likely to make an impulse purchase, at 66 percent of Gen Zers and 57 percent of millennials, compared with 45 percent of Gen X and 38 percent of baby boomers.

Yet, baby boomers were more likely to regret at least one of those purchases than any other generation, at 70 percent, compared with 63 percent of Gen X, 61 percent of millennials and 64 percent of Gen Z.

Women are more likely than men (at 52 percent and 45 percent, respectively) to be inclined to make a compulsive purchase from social media. More than two-thirds (68 percent) of women said they later regretted at least one of those buys, compared with 58 percent of men.

Influencers play a large role in the pressure to make impulse buys on social media platforms. A lot of people feel that they, too, could be that glamorous if only they had that coveted bathing suit or pair of shoes. Social media marketing and the buy now, pay later industry have combined to make it easier than ever to chase this illusion of perfection four interest-free payments at a time.

— Ted RossmanCredit card senior industry analyst

Why social media harms younger generations’ money perceptions so much

A prominent reason why social media negatively impacts users’ perceptions of money: 1 in 4 (25 percent) say they have posted on their platforms with the intent of looking successful, while another 62 percent say they’re sure the people they follow do the same sometimes.

That’s especially true for younger generations, with nearly half of Gen Zers (46 percent) and more than a third of millennials (38 percent) admitting they made social media posts with the purpose of appearing successful, Bankrate’s poll found. That compares with 17 percent of Gen Xers and 9 percent of boomers.

Yet, almost 3 in 4 Gen Z and millennial social media users (73 percent and 70 percent, respectively) say they believe the people they follow post with the intent of looking successful, compared with 62 percent of Gen X and 51 percent of baby boomers.

As far as what social media users hope their posts portray, more than half said their values (53 percent), followed by authenticity (47 percent), happiness (40 percent) and intelligence (38 percent). Just 16 percent of social media posters said they hope their posts portray attractiveness, and 10 percent marked wealth or success.

At the same time, 22 percent of Gen Zers and 14 percent of millennial users hope their posts portray wealth and success compared to just 7 percent of Gen X and 3 percent of boomers.

“As we scroll through our feeds, we can get jealous of what other people have,” Rossman says. “We may feel like we can overcome that by overspending to put forth an unrealistic version of ourselves which we hope will impress others.”

Methodology

Bankrate.com commissioned YouGov Plc to conduct the survey. All figures, unless otherwise stated, are from YouGov Plc. The total sample size was 2,664 adults. Fieldwork was undertaken between June 22-24, 2022. The survey was carried out online and meets rigorous quality standards. It employed a nonprobability-based sample using quotas upfront during collection and then a weighting scheme on the back end designed and proven to provide nationally representative results.

Written by
Sarah Foster
U.S. economy reporter
Sarah Foster covers the Federal Reserve, the U.S. economy and economic policy. She previously worked for Bloomberg News, the Chicago Tribune and the Chicago Daily Herald.
Edited by
Banking editor