How to combat 'financial cyberchondria'
19 April 2012
If your finances are floundering or your credit score is crashing, Twitter and Facebook could be to blame.
Turns out reading tweets, Facebook status updates and Google+ posts create a whole new kind of stress beyond "is my former high school flame still single?" and "what's my favorite celebrity up to?"
"Social media can lead to developing a case of perceived financial failure," says Scott Bea, a clinical psychologist at the Cleveland Clinic. "It can also lead to a lot of financial-related stress."
That's because frequently reading status updates and tweets about friends, real or virtual, who are spending money on vacations, dinners out, new clothes or on the cyber deal of the day can cause a bout of "financial cyberchondria."
What's that? You've probably heard of hypochondria, the obsessive anxiety about one's health. Around the turn of the 21st century, scientists began noting a Web-based form of the disorder, in which people would stress themselves into illness by self-diagnosing their symptoms using medical websites. The "my headache must be a brain tumor" syndrome was dubbed cyberchondria.
Now comes financial cyberchondria -- misdiagnosing your financial shortcomings using the Web. In this case, the "germs" lurk on social media websites.
So you could start coming down with some of the same financial symptoms of some of your social media connections or develop a host of financial illnesses thanks to all those tweets and Facebook status updates.
Unfriending and not following is rarely a cure. Who would want to shut themselves off from the virtual realm? "You need to know how to prevent or recover from financial cyberchondria since it's nearly impossible to avoid all social media," says Bea.
Here's a look at how social media can influence your finances -- and what to do to keep those gilded tweets and Facebook status updates from blowing up into a case of financial meltdown.
You're tempted to keep up with the Virtual Joneses
Because social networking tools such as FourSquare tip off you and the rest of the world to where your friends are, it's tempting to want to keep up with the social habits of virtual pals. And those habits can be costly. "Rarely do our friends and acquaintances 'check in' at Walmart," says Karen Carlson, director of education at InCharge Education Foundation, a financial literacy and consumer education program. "But they certainly announce when they check into four-star restaurants, major retailers and attractions."
Then there are all those tweets and status updates about the cool gadgets and gizmos your friends buy, the vacations they're planning and the splurges they're indulging in.
"It's only natural that we want to buy what our friends buy and vacation where they vacation. The only problem is that you're trying to keep up with hundreds or thousands of virtual friends in a social network," says Carlson.
Quick fix: Along with your neighbor, high school BFF or fellow soccer carpool pal, experts suggest you friend and follow folks who are frugal and who post about shopping at garage sales rather than for designer one-of-a kinds.
Being part of a social network should not create pressure to blow your budget or compete in a race toward financial doom. So if you're absolutely dying to shop, use social networking to friend or follow deals instead of impulses that make you want to go out and buy all of the newest and fanciest things, says Craig Steinhoff, member of the American Institute of Certified Public Accountant's National CPA Financial Literacy Commission.
And instead of 'liking' a pal's post or a page that's geared toward spending (like shopping sites or stores' pages), "like" the Facebook page of a nonprofit organization or informative website that offers a daily dose of budget-friendly tips and advice. "You can control your social networking experience by opting in to the kinds of messages that will help and support your goals," says Carlson. You can also follow financially fit people or organizations that promote consumer credit advocacy and education on Twitter.
Be wary of becoming one of the "Joneses," too. Carlson suggests not bragging about your own purchases and financial experiences on social networks. "One characteristic common to frugal people is that they don't care what other people think about them," she says. So they're not concerned that their friends and tweeps know about their latest deal or shopping spree.
You feel like a financial failure
Bea says reading about the financial escapades, adventures and successes of your neighbor, college roomie or coworker can make you feel like a financial failure, especially if you're nowhere near able to afford the same luxuries or indulgences.
"When you read on Facebook that your college roommate just built a dream house or your former high school BFF just bought a new car, it's natural to compare your life and financial ability to do those things to your virtual friend's life," says Bea.
You could feel a little financially unglued and anxious because you can't afford the same luxuries or purchases.
"We tend to compare ourselves to others in a more favorable spot. Rarely, do we compare ourselves to the impoverished or those we consider worse off," says Bea.
Quick fix: Read tweets and posts only after you've taken your daily "reality pills" to keep from feeling like you're a financial flop.
"You can enjoy your friend's posts, but you need to keep in mind that people typically only share information that they have chosen to share for some reason," says Bill Druliner, a financial counselor and Midwest regional manager with GreenPath Financial Wellness in Milwaukee, WI. "Many times updates and tweets are biased towards the positives, the things that make someone look cool. They're not sharing the whole story."
A pal's "look at our dream house that we just bought" status update probably fails to mention the house comes with an adjustable rate mortgage. "Your friend probably doesn't include that if their spouse's overtime dries up, they're going to be strapped to make the mortgage payments," he says.
Likewise, an online photo album of a friend's trip to Jamaica rarely includes the caption, "we will be paying this trip off for the next 10 years at 18 percent interest on our credit card."
You're more likely to give in to impulse purchases
Those tweets and Facebook updates filled with coupons, deals and offers can tempt you into buying things you don't really need, want or can afford. But the risk of losing out on a cyber deal that loads of your virtual pals have already taken advantage of can lead to a temporary loss of perspective -- and perhaps to a mountain of debt down the road.
Quick fix: Mackey McNeill, a personal financial specialist in the Cincinnati area, says instead of blowing your budget just because of a Google+ post, emulate the thrill of a splurge instead.
"Make a list of 10 things that cost nothing that give you the same high you get when you splurge on a purchase. Then indulge in those things instead of the new clothes, shoes, golf clubs, etc., that are being offered via a cyber sale."
For instance, many companies offer coupons, freebies and discounts just for liking them on Facebook or following them on Twitter. You can also use Pinterest, which allows people to ‘pin' links to their favorite sites with pictures.
"I have clients who use Pinterest to save because they share easy-to-make recipes, links to frugal fashions and other ‘pins' that help, rather than hurt, your wallet," says Steinhoff.
Bottom line: Not all cyber deals, tweets and status updates are what they appear to be. So before succumbing to status update envy, count to 10 and give your commonsense a chance to combat the onset of financial cyberchondria.