Although millennials are positioning themselves to be in better financial shape than other generations, their social media-fueled FOMO, or fear of missing out, puts their finances in danger.
A study commissioned by Allianz Life has found that half of the millennial respondents said they spend more money going out than they do on rent or mortgage.
Although millennials are often seen as financially irresponsible, the study found that the generation actually feels more financially confident than Gen-Xers do. Also, 48% of millennials with a 401(k) contribute 10% or more per month, the highest percentage of any other generation.
While millennials continue to build their financial strength, they face one of their biggest risks from social media. Because of social media, 61% of millennials said they feel inadequate about their own life and what they have. Fifty-seven percent said they had unplanned expenses because of what they saw on their social media feeds, with 55% saying they experienced FOMO.
The study also found that 88% of millennial respondents believe social media creates more of a tendency to compare one’s wealth and lifestyle with others. Respondents who shared the same view made up 71% of Gen-Xers and 54% of boomers.
“Millennials are finding innovative ways to build their financial strength and are becoming more confident because of these actions,” said Paul Kelash, vice president of consumer insights for Allianz Life. “But, more than any other generation, social media and the allure to spend beyond their means could have long-term negative effects on their finances if they’re not careful.”
The study commissioned by Allianz Life was conducted by Larson Research + Strategy through an online survey in May 2017 with 3,006 US adults ages 20–70 with a minimum household income of $30,000.
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