The Real Cost of ‘FOMO’: How Fear of Missing Out Can Drain Your Wallet
We’ve all been there—scrolling through social media, watching friends post their latest weekend getaway or new luxury purchase, and suddenly, you feel that nagging sense of inadequacy. The "Fear of Missing Out," or FOMO, is a powerful force, one that pushes us to keep up with the trends, even when our bank accounts are begging for a break.
But the real cost of FOMO isn’t just the money you spend trying to keep up; it’s the emotional toll it takes, too. So, how can you navigate FOMO without breaking the bank or sacrificing your financial goals? Let’s get into it.
The Hidden Cost of FOMO
At its core, FOMO makes us feel like we’re missing out on something crucial, whether it’s an experience, product, or status symbol. Social media is the perfect breeding ground for this, bombarding us with images of vacations, gadgets, clothes, and meals that seem essential to living the "good life."
But here’s the thing….FOMO often leads to impulsive decisions. We act on emotion rather than logic and that can result in overspending, buyer’s remorse, or even debt.
Take a look at your past purchases. How many of them were made because you thought you "had to" or felt left out of something? FOMO can push you to spend on things that have little long-term value and that don’t align with your actual goals or lifestyle.
The Real-Life Impact of Impulsive Spending
The financial impact of FOMO can be shocking. Consider the following:
Small but frequent indulgences: The "treat yourself" purchases—an extra takeout order, a new piece of clothing, an unplanned night out. While they might not feel like much at the time, they can add up quickly.
Major but unnecessary purchases: If you’ve ever splurged on a vacation, concert tickets, or gadgets just because you saw others doing it, you’ve felt FOMO’s grip on your wallet.
Emotional spending: FOMO isn’t just about buying things. It can also make you feel anxious or insecure, which can lead to emotional spending as a form of coping.
Over time, these small impulsive buys can lead to financial stress, especially if you’re living paycheck to paycheck or not prioritizing your savings. The long-term effects can also include a lack of progress on your financial goals, like building an emergency fund, saving for retirement, or paying down debt.
How to Overcome FOMO Spending
The first step is recognising that FOMO is not an emergency. That Instagram-worthy trip or the latest toy will still be available later. Here’s how you can combat it:
Identify your triggers: Pay attention to what sparks your FOMO. Is it social media, peer pressure, or a need for instant gratification? Knowing your triggers helps you anticipate and control your impulses. I nearly purchased an XL bag of freeze dried sweets because Instagram told me it was the latest food trend - no more late night scrolling whilst I’m hungry!
Set clear financial goals: When you have a plan, it’s easier to say no to distractions. Whether it’s saving for a home, building your retirement pot, or taking a holiday you’ve planned for, having clear objectives helps you stay focused.
Create a ‘FOMO Fund’: Instead of buying on impulse, allocate a specific amount of money to a "FOMO Fund." Use it for splurges when you really want to enjoy a treat, but make sure it’s within your budget and doesn’t derail your larger financial plan.
Practice mindfulness: Stop and take a moment before making a purchase. Is it something you truly value? Is it aligned with your financial goals? Giving yourself permission to pause can make a huge difference in resisting FOMO.
Shift your mindset: Instead of feeling deprived, focus on the freedom that comes from living below your means. The less you spend, the more control you have over your future.
FOMO Doesn’t Have to Win
FOMO may always be lurking, but that doesn’t mean it has to dictate your financial decisions. By understanding its influence and implementing mindful strategies, you can regain control over your spending and stay focused on what really matters to you.
So, the next time you're tempted by the latest must-have, remember: it's not about what you're missing out on; it’s about what you're gaining by sticking to your financial goals.
p.s. not advice obvs!
This article would be correct as at the time of writing but as we know; rules and regulations can change. Seek advice before taking any action.