FINANCE THAT FEELS issue #5
The Consumer Culture Matrix
Finance That Feels is about making money meaningful in our lives. Money touches almost every aspect of life and far too often is a source of stress and anxiety rather than confidence, empowerment, and impact. Together we are flipping the script.
The Stanley Cup Craze
If you follow me on Instagram you’ll know that I’ve talked a lot about the Stanley Cup Craze. For the record, I do not own a Stanley. I’ve participated in consumer trends many times, but something about this one made me pause, probably because I felt this same desire with another cup–the Yeti Tumbler–about 5 years ago.
Do I use it often? Yes.
Did it change my life? No.
Do I feel included in some cool community of global Yeti owners? No.
Do I feel dumb for being a sucker for social media marketing? Yes.
We all know about Fear of Missing Out (FoMO), the phenomenon that the National Institutes of Health defines as the pervasive apprehension that others might be having rewarding experiences from which one is absent. John Maynard Keynes, father of Keynesian economics, identified human herding behavior in the 1930s. In 2004 researchers coined the term FoMO and attribute it completely to social media. Oxford Dictionary officially added it to the English language in 2013 (clearly out of a sense of FoMO :)
In psychology, FoMO is an extension of self-determination theory (SDT). SDT theorizes that social relatedness drives intrinsic motivation, which in turn encourages positive mental health. Researchers propose that FoMO is a negative mental state that results from unmet social relatedness needs. FoMO is a two-step process: First, there is the perception of missing out. Second, this apprehension is then followed by compulsive behavior to maintain social connection.
Consumer FoMO
Among my peers, FoMO is often expressed in the context of physical absence. We joke about it; “oh my gosh all my girl friends are going to Cabo, I have so much FoMO!” It’s entrenched in the twenty-first century lexicon and, for the most part, harmless. However, there is a type of FoMO that pervades our money behavior but is much less discussed and rarely confessed: Consumer FoMO.
Let’s go back to that Yeti Tumbler. In 2019 I was so influenced by a content creator on Instagram that I bought not one but two Yeti Tumblers via an affiliated link from which she earned a commission. Social media leverages our inherent desire for social connection for someone else’s profit.* We all know the truth, that social media is not real life, yet the desire for real connection is so strong that we pursue to have what they have, those on the other side of the screen, in a primal attempt to consummate social relatedness. I’ve been calling this the Consumer Culture Matrix.
(Yes, I am referring to The Matrix, the film with Keanu Reeves that came out in 1999. While the narrative twist left an impression on younger me, I find myself referencing the movie’s symbolic meaning more and more the older I get, which is that there is a reality, or system of control, that exists purely within the mind.)
In the twenty-first century, social media is a type of reality/system of control in our minds. In this fabricated place, we are barraged daily with sponsored product content and sneaky #ads. It is a place where it seems everyone has endless resources to buy endless amounts of things to create a life that is endlessly easy, happy and aesthetically pleasing. Pursuing an easy, happy and aesthetically pleasing life is not a bad thing; chasing something that doesn’t actually exist is the problem.
Don’t get me wrong: I have nothing against the Stanley Cup. The virality of the product makes it a great example to use for illustrating the power of FoMO and social media on our money behavior. Maybe it’s not the Stanley Cup for you, but how many times have you purchased something you didn’t really need because you saw it on social media? How often have you bought something because everyone else has one? That is compulsive spending behavior.** History has witnessed this type of compulsive money behavior–human herding–many times. In the 1600s there was the Tulip Mania. There was The Roaring Twenties, The Housing Bubble, and Meme Stocks most recently.
Ignorance is bliss, until it’s not.
FoMO exists because of social media, and social media capitalizes on our deepest human desires of social connection. A product gone viral on TikTok will never fulfill that inherent social need. Instead, it will leave you wanting for more. Data confirms the unfavorable effects of this such as negative emotions, lack of sleep, reduced emotional competency, emotional tension, anxiety, and lack of emotional control. It is noteworthy that these negative effects closely match the negative effects of money stress.
If you experience FoMO, good! It means you are human. It also means the capacity to build the life you want to live. From a financial perspective, this happens by aligning your daily money decisions with your core values and long-term goals. Our instinctual brain is not built for that kind of discipline and focus. Instead, it seeks instant gratification, another reason why FoMO is so powerful.
As we navigate The Consumer Culture Matrix it is important to define and know for yourself what is enough. To draw from the February Finance That Feels Letter:
Enough is a concept we don’t talk enough about. Enough makes us uncomfortable because in asking what is enough in our lives, we inevitably confront the deep human insecurity of am I enough. No amount of external enough-ness will ever quench the level of unknowns presented in daily human life. It is up to us to define enough in our lives, starting with the purpose and meaning of our lives. Unless we define enough, we will live our lives reaching for what is just beyond the horizon, giving up the wealth of being that is right in front of us.
My guess is that enough will be measured more by the people and real connections in our life than whether or not you bought that thing that you wouldn’t have known or cared about were it not for social media.
PRACTICAL TIPS:
Next time you feel the FoMO urge, ask yourself these questions: 1) Am I buying this thing because I saw it on social media? If it were not on social media would I know or care about this thing (ie. is this FoMO?) 2) What measurable value would this thing bring me? 3) What does this thing do for future me? Does it support my values and my goals?
Create clear guidelines of what kinds of purchases align with your values. For clothing, for example, my personal guideline is to buy only used and/or ethical and sustainable products, preferably by women. That helps me filter out a lot of the noise! When I do purchase, I am at ease knowing it aligns with my values.
If it’s too irresistible add the item to cart and then don’t revisit it for a week. Time will allow you to decide if it’s really worth it and needed. (Honestly most of the time I completely forget about it when I do this.)
*The profiter includes the content creator but more significantly the brands behind the sponsored products and especially the technology platform.
**For fun I did the math: Had I invested the $76 I compulsively spent on the Yeti Tumblers in the S&P 500 in September 2019 when I purchased the cups, it would be worth $143.34 today. Basically double, and I can’t get that back.
CONTINUE THE CONVERSATION
Which one of the questions (under “Practical Tips”) is most helpful to you for resisting FoMO? I would love to hear from you. Let me know in the comments or find me on instagram @emiliedayanhill.
RECOMMENDED READING
Predictably Irrational by Dan Ariely
The Behavioral Investor by Daniel Crosby
Thinking, Fast and Slow by Daniel Kahneman
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Finance That Feels is born out of a desire to use my training as a Chartered Financial Analyst, my on-going experience as a high net-worth money manager, and my fascination with mental health and wellness to help empower women with their money.
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DISCLAIMER
The opinions of Emilie Hill are solely her personal opinions and not necessarily the opinions of her employer. Social content provided by Emilie is for educational purposes only and does not constitute investment advice or an offer to sell or a solicitation to buy any security.