Lots of bad information is delivered over social media that's just inaccurate, says Kristy Archuleta, professor of financial planning, housing and consumer economics at the University of Georgia. It's hard for someone who may not have had a lot of life experience or financial knowledge to be able to navigate what's accurate and what's not.
Someone might post a photo of them posing with a boat or fancy car, which could make you feel like you should own those luxury items, too, Ethridge says. But in reality, the person posting those images might not own them, either. Social media induces conspicuous consumption that happens unnecessarily.
A 2023 NerdWallet study found that nearly two-thirds of Americans (65%) believe social media has led to increased overspending. In addition, 18% of Americans say they have made a regrettable purchase as a result of something they saw on social media.
When you hear specific financial advice on social media, financial therapist and accredited financial counselor Rahkim Sabree suggests first checking the credentials of the advice-giver. A lot of influencers provide information that is very subjective, he says, and their advice may apply only to a subset of people.
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