Facebook is stealing your money. There I said it. The site where you go to check up on friends and family is one of the biggest reasons why you will never be financially independent. Heck, it’s the reason why you won’t even be financially comfortable. If you are a regular user on Facebook, the odds are stacked against you that you will be financially independent.
Some reading this might be taking offense. You’ll tell me that you are on Facebook all of the time and you are doing fine financially.
But are you really?
Do you have zero consumer debt? Do you follow a budget to keep spending in check? Do you have at least 6 months worth of living expenses in an emergency fund? Do you max out your retirement accounts each year?
If you answered no to any of these questions, then you aren’t in of good financial shape as you think.
So now you are wondering how Facebook is keeping you poor.
The Ways Facebook Is Stealing Your Money
The first way Facebook is keeping you poor is through wasted time. While some people take a few minutes a day to check their friend’s status or update their own, others waste loads of time. They check friend’s status updates, comment, play games, etc. And I won’t even go into how watching one innocent video suddenly turns into 10 on YouTube. In fact, Facebook CEO Mark Zuckerberg stated that the average time spent on Facebook is 40 minutes a day.
While you might think that isn’t a big deal, remember that this only per day. On a weekly basis, this is roughly 7 hours a week that are being wasted on Facebook. To some this doesn’t sound like much, but what could you be doing with those 7 extra hours a week?
Working on starting a business? Setting up a budget? Reading more? Enjoying a hobby? Maybe getting to work earlier or staying later so you can become filthy rich? Get some much-needed sleep? Or even strengthening your relationships?
Falling Victim To Advertising
The next way Facebook is stealing your money is through advertising. The majority of revenue that Facebook earns is from ads. These advertisers can target the exact people they think will buy their product or service. Remember, they have tons of personal information about you. This includes in many cases:
- your high school
- your college
- your education level
- your relationship status
- your job
- where you live
- who your friends are
- things you like
- ads you click on
- links to things you bought and mentioned on your wall
This information tells advertisers more about you than you think. Every time you “like” something, you are giving one more piece of data about your interests to Facebook to sell to advertisers so they can better sell to you. And by better sell to you I don’t mean introduce you to products you need, but rather make you think you really need something you don’t.
In addition to this, think about how many third party apps you use that you log into using your Facebook account. I bet you never thought about that information getting passed along did you? While the information is not personal, it is still one more piece of the puzzle that makes you who you are and allows advertisers to better target their ads.
When Facebook takes all of this information and crunches it using their algorithm, they even estimate your annual income, which helps advertisers better target their products to you.
Finally, have you noticed after you search for something and then go to Facebook, ads for that product magically appear in your feed and off to the side? This is one more example of advertisers getting to you.
While all of the above contributes to Facebook stealing your money, there is another reason and it’s even bigger.
The Need To Fit In
The biggest issue with Facebook is that we as humans feel the need to fit in. Facebook knows this and it is what makes Facebook so dangerous. They use our need to fit in against us. Here are the two ways they do this:
- Keeping Up With The Joneses
- The Short-Lived Increase In Self-Esteem That Facebook Provides
Keeping Up With The Joneses
When you browse through your feed on Facebook, you see what your friends and family members are up to. You see the pictures from their trip to the Cayman Islands. You see the awesome party they just had. In other words, you see all of the great things happening in their lives and you want that too.
You want to go on vacation. You want to get a shiny new car. You see their perfect life. You then spend money to do these things even though you can’t afford them because you want to fit in and keep up. Don’t feel bad about this, after all it is human nature.
We all want to be part of a group. This is why when in a group setting most people go along with what is suggested because they don’t want to be singled out. We don’t consciously do it. It is how we are wired.
Likewise, studies have shown that we buy name brands to show that we are part of a group. Why do you buy a Coach purse? Is it because of their high quality or because they make a purse like no other company does? Or is it because you see everyone else walking around with them and that makes you want one too? It’s a status symbol. Having one tells others that you too are cool and trendy.
Most likely, you never thought about it this way, mainly because you’ve never thought about why you want that brand of purse so bad. But chances are you want one because you see everyone else with one.
The Short-Lived Increase In Self-Esteem
The second reason is the need to increase your self-esteem. When you post pictures of your new car, you get a temporary increase in self-esteem. I know this feeling well.
When I was a new college graduate over 10 years ago, the economy was in recession and I couldn’t find a job. I became depressed and started spending money I didn’t have. Buying things made me feel better about myself. The problem is that the high wore off faster and faster, causing me to spend more and more, and go into more debt. Eventually I addressed my low self-esteem issue, overcame it, and set up a plan for getting out of debt.
My experience with debt is very much like showing off your success on Facebook. You get a high when you show that you bought the big house or got the new car. The problem is that this feeling fades and you need to find a way to replace it.
You might do this by posting vacation pictures or showing the designer jeans you just bought. Heck, some people even post fake updates to make others think their lives are better than they really are.
The Dangerous Cycle Of Facebook
The cycle of keeping up with the Joneses and increasing self-esteem is a dangerous cycle. In fact, comparing ourselves to others through social media has led many to depression.
The more you see others “success” the more you want to show off your success too. You get the temporary rise in self-esteem when you post, but it’s only temporary. After all, you are putting yourself into worse and worse financial shape by purchasing things you can’t afford.
The only catch is that you don’t see others rising debt levels. You think they know something you don’t. How can they afford the new car, the vacations, the nights out without going into debt? Most likely they are in debt. They just don’t post about that. Remember, the idea of posting is to raise your self-esteem. Posting that you are in $10,000 of credit card debt is not going to raise your self-esteem.
What Can You Do About This?
So how do you stop Facebook from stealing your money and keeping you poor? The simple answer is to not even use the site. But I understand this is not an option for many people, even though some people have sworn off of Facebook. If you aren’t ready to end the relationship with Facebook, you have to limit your exposure to it. Here is how.
Choose to visit the site as little as possible and as early in the day as possible. This is because the earlier you check your feed, the greater the chance you will get busy at work and forget about those Caribbean pictures that were posted.
Don’t scroll through your feed on a lazy weekend afternoon. The odds are you will get sucked in and spending money you don’t have.
Take the app off of your smartphone. How many times are you waiting somewhere – the doctor’s office, the grocery store – when you habitually pull out your phone and start checking Facebook? Riding on a train/subway and a taxi are other times when people check Facebook without ever realizing it.
Next time you are out, look at people who are supposedly “out together” yet instead of talking to one another, they have their heads buried in their phones, checking their social media accounts. Think for a minute if this is you.
When you go on Facebook, keep things in perspective. People only post the great things happening in their life. Remember above when I said you post the highlights of your life to increase your self-esteem? This is the same thing others do too. So when you see awesome vacation pictures, new cars, etc., understand that this isn’t the whole story.
Think back to a time when you were shocked that a friend was getting divorced. It was a shock because everything seemed so perfect. You never know what is going on behind the scenes. You rarely see people posting about their awful day, unless they mention that the new pair of shoes they just bought made up for the horrible day they just had.
They filter their posts so that you only see them and their lives at their very best. We do this subconsciously because we want to impress people.
Also know that comparing ourselves to others is natural. It’s human nature to see how we compare to others in life. But up until now, we did this in real life. We see that our co-worker seems to have it all together but then every so often they come into work frazzled. And by talking with them, we see that their life isn’t perfect.
But with social media, we are comparing ourselves to something that isn’t real. We are trying to compare ourselves to a perfect image the other person wants us to assume is real. So know that it OK to compare yourself to others, but just don’t do it online. Do it in person.
Finally, when you see the same people posting updates all of the time, know these are the people that may be the least successful. Look at the chart below. It shows the amount of time people watch TV per day based on income. As incomes rise, the less they watch TV.
This is the same thing about surfing the internet and in particular, being on Facebook. The truly successful don’t have the time to waste. They are out improving themselves, their relationships and their lives. For more about the habits of successful people, you have to read about the 16 habits of people who are wealthy and successful.
While I am not suggesting quitting Facebook cold-turkey, you do need to be aware of how it influences you. Just like advertisers can get us to buy things by tapping into our emotions, so too does Facebook by getting us to be emotional about the things people post.
Remember, our brains work on emotion first, then logic. This is why you buy those jeans then regret them a week later. They met your emotional need at the time, but your logic kicked in later and made you realize you never needed them in the first place.
Don’t let Facebook cost you your time and money. Limit your time online and use that time to better yourself, your relationships and your life.