How social media can tank your finances
Selfies and social media are bad for your finances. People have always felt pressure to spend like their friends, but now it’s a continuous, almost real-time distraction.
The latest debt numbers came out last week and they weren't exactly impressive. The average ratio of debt to disposable income reached 163.3 percent at the end of 2014. Most people agree that low interest rates that have been available to Canadians through mortgages and home equity lines of credit, is causing us to pick up more debt. Whether it be because Canadians have spent too much on houses and thus have to borrow to afford life's luxuries.
Social media has cause us to feel pressured to live up to the lifestyles of our friends and relatives. Financial Planner Shannon Lee Simmons has noticed how the selfie phenomenon has added this pressure in today's millenials who enjoy spending their money socializing at restaurants and bars. Though older people are just as vulnerable to these spending habits, as keeping up with their friends can be just as alluring to them as well.
People tend to rationalize their overspending by thinking they deserve it. Banks and retailers are becoming ever better at pushing cheap credit and products through social media, by way of ads and having your friends and family showing off their latest purchases. The need to "catch up" to them often leads Canadians to rack up big amounts of debt.
It is important to understand how to manage your finances so that you can properly save for the future. Talking with a mortgage broker will help you better understand your financial limits when planning on purchasing a home.