Financial 'FOMO': How Facebook and Instagram can lead to bad spending habits In the personal finance world, a common mantra has always been: "Don't try to keep up with the Joneses." Financial advisers say this to keep people from overspending in their quest to look as good as, drive as nice a car as, or vacation as often as the proverbial Jones family — who are probably living paycheck to paycheck and amassing credit card debt to fund their lavish lifestyle. Then came Facebook, Instagram, and other social media platforms that amplified "FOMO," or the fear of missing out. The ceaseless posts of people boasting about their fabulous clothes, cars, birthday parties, cruises, or other spending sprees come fast and furious. A few years ago, a video of a megachurch pastor went viral. He eventually was skewered for splurging on a $200,000 Lamborghini for his wife — the big event captured on Instagram for all to envy. Showmanship was the point, because what else would motivate someone to capture such conspicuous consumption? Why tell the world that you got your spouse a car that cost the equivalent of a home in some Zip codes? Social media amplifies the reach beyond people's friendship groups and neighborhoods — and thus beyond their spending thresholds. The Joneses have been replaced by the Kardashian family's flashiness. Even the clan's tiny tots sport glamorous outfits, strollers and accessories that cost more than some folks' weekly paychecks. Part of their claim to fame and profits is their own products, touted on their social media platforms. Kylie Jenner just introduced baby products "tested and approved" by her 3-year-old daughter, Stormi. (A limited-edition Kylie Baby PR Box signed by Jenner goes for $200 — for a baby. SMH!) We now have more evidence than ever from a whistleblower that Facebook knew that its various apps were pushing through posts that harm the self-image and mental health of young girls. Former Facebook product manager Frances Haugen recently outed herself as the source of leaked internal company data. "Facebook in its current form is dangerous," Haugen said in an interview with The Washington Post. But it's not just young girls who are being hurt. It's not much of a leap to say these platforms are probably damaging people's financial lives. Wealth sells. It gets eyeballs. Of course, checking out society pages, television shows and movies about the rich and famous and their extravagant lifestyles has always been a spectator sport. But now mobile devices are constantly pinging people with images and stories that make them wish they had more luxuries of their own. It's a daily barrage of boasting. Enough just isn't enough when someone on Facebook or Instagram has more. Seven in 10 Facebook users — and around 6 in 10 Instagram and Snapchat users — visit these sites at least once a day, according to the Pew Research Center. Majorities of 18-to-29-year-olds say they use Instagram or Snapchat, and about half say they use TikTok, Pew found. In response to the outrage about its practices, Facebook said in a statement: "Every day our teams have to balance protecting the right of billions of people to express themselves openly with the need to keep our platform a safe and positive place." For many spendthrifts, these platforms are not a mentally safe space. It's incredibly detrimental to consume so much of this media centered on consumption and the haves with their glamorously airbrushed lives. The documents Haugen shared show a system that feeds into users' low self-esteem. Social media is producing a new reference group of influencers. In-person peer pressure is bad enough, but now young girls and boys are trying to compete with people they don't even know. In addition to hyper-sexualization that makes these young adults feel their bodies aren't good enough, there's the added supersized burden of dressing to impress on a world stage. I'm the parent of three 20-somethings, and they've elected to keep their social media engagement to a minimum. At first, it was because my husband and I prohibited them from the platforms out of an abundance of caution. Once they were allowed to create accounts as older teens, they ultimately limited the usage on their own. The comparisons were psychologically damaging, even though they were living a pretty good life. "It just made me feel bad about myself," our eldest daughter said. "Comparing myself to the highlight reel of everyone's life would leave me feeling that I wasn't enough or didn't have the lifestyle that I wanted when in reality I actually do." Much of what is viewed isn't good for children or adults. In my community work, I've seen how people spend more money than they plan to or go into debt because they see so many friends and influencers living it up. Social media can be a stress producer, which is why we all probably need less screen time. Watching others live what we think are better lives can make you feel worse about your own life — and that can affect your psychological and financial well-being. Reader Question of the Week If you have a personal finance or retirement question, send it to colorofmoney@washpost.com. In the subject line, put "Question of the Week." Please note that questions may be edited for clarity. Q: I was thinking of moving to a coastal community after retiring but all these storms have me worried about the rising cost of living near the water. Is it worth it? A: I have my own dream of getting a place near the beach because I love being near the water. And we are not alone. About 94.7 million people, or about 29.1 percent of the total U.S. population, lived in coastline counties in 2017, a 15.3 percent growth since 2000, according to the Census Bureau. But, like you, I've been rethinking that plan. The Census Bureau points out that there were 13 hurricanes that caused more than $10 billion in damage each in the Atlantic and Gulf of Mexico coastal regions between 2000 and 2017. One of the biggest expenses of moving to a coastal region is insuring your home. And that cost is about to go up – big time. As reported by The Washington Post last week, "the Federal Emergency Management Agency will incorporate climate risk into the cost of flood insurance for the first time, dramatically increasing the price for some new home buyers. Next April, most current policyholders will see their premiums go up and continue to rise by 18 percent per year for the next 20 years." The price hikes won't just be impacting coastal homes. Homeowners in inland states such as Iowa, Missouri, and Nebraska, where creeks, streams, and rivers overflow during heavy rains, will also see price increases in their government-backed flood insurance, the Post reported. Then there was this: "Climate change will affect people who weren't threatened before. New technology that allows analysts to study the environs around each home led to a stunning find: 6 million homes in states such as Utah, Idaho, Vermont, and Tennessee that didn't require insurance because they were thought to be safe from flooding are actually at risk because of climate change." Read: The price of living near the shore is already high. It's about to go through the roof. The country's flood insurance program is sinking. Rescuing it won't be easy. What seniors should consider in determining whether to move One option you might consider is renting or doing extended stays in a coastal community. In fact, many seniors are selling their homes and renting. Read: Demand rises among seniors to rent rather than own in active-adult communities Moving for retirement is a big decision, and with insurance costs rising, just be sure to crunch the numbers to ensure you can cover the expense of living near a body of water. In Retirement News Part of planning for retirement and then living on the money you've saved or invested is keeping up with the issues that you need to know. In this section, I feature blogs, news stories, new research, surveys, and government policy changes that could affect your retirement. If you see a news story or issue you think would help folks, let me know, and I'll check it out and share it with newsletter subscribers. AARP has created a new online platform to address five megatrends that are shaping the future of work for people 50 and older. "The pandemic has amplified and accelerated a number of these factors in the workforce," AARP said. Here are the trends AARP identified, along with articles about the issues: Longevity: With one in three people ages 65 to 74 expected to be in the workforce by 2028, it is important to address the issues related to a longer work history, such as age discrimination. Read: What does increasing life expectancy mean for the future of work? Lifelong learning: Often employers complain that older workers need to upgrade their skills, particularly in areas related to technology. Read: How will the future of work shape our learning needs? Income inequality: "Significant racial, ethnic and gender inequities limit job paths, earnings and savings, and these concerns are going to continue to escalate with an increasingly diverse workforce." Read: What does rising income inequality mean for the future of work? Advances in technology: When it comes to hiring practices, technology could exacerbate age bias and other discrimination, AARP points out. Read: What do advances in technology mean for the future of work? If you feel technology cost you a job, I'd like to hear from you. Please email me at colorofmoney@washpost.com. Put age discrimination in the subject line. Gig economy: Many older workers are working in the gig economy. AARP says 20 percent of contingent workers are 55 years and older. Although such work has its advantages, the jobs often lack benefits such as healthcare, sick days, etc. Read: What does the rise of contingent work mean for the future of work? Retirement Rants and Raves This is your space to rant or rave about anything related to retirement. Send your comments to colorofmoney@washpost.com. Please include your name, city and state. In the subject line, put "Retirement Rants and Raves." Responses may be edited for clarity. Stan Borko of Boston wrote that he's very concerned about the Social Security retirement and disability trust funds becoming depleted, resulting in reduced payouts if the issue isn't fixed. "Two areas specifically scare me, the pandemic has economically hindered employees and employers paying into these funds and Congress and the White House almost always wait until a crisis hits before passing some knee-jerk solution," he wrote. "Better planning could make these implementations less painful for constituents." Borko is right to be concerned. Here's a link for the recent trustees report. And read my column about the findings: Covid took one year off the financial life of the Social Security retirement fund IRA, 401(k), 403(b) or TSP Millionaires Share Their Stories of Financial Success Over the last several weeks, I've asked readers to share stories of how they crossed the millionaire threshold in their IRA or workplace retirement account. I'm collecting the stories for a future project. If you have already responded, I'll be in touch. If you haven't responded and would like to share your story, email me at colorofmoney@washpost.com. In the subject line, put "401(k), 403(b), IRA or TSP millionaire." In the meantime, I wanted to share what one reader wrote about contributing to a 401(k) plan. "We started contributing in 1985 when it was first offered by my husband's employer," the reader wrote. "We only contributed enough to get the full employer match until 1996. When we purchased our house in 1984, despite having good credit, the interest rate was 13 percent. We had a kid in 1989 and daycare was expensive, and we were putting money into a savings account. In 1997, with salary raises, we increased our contributions until 2001 when we started contributing the maximum allowed. Worked on a long-term projection for our retirement. With a pension, Social Security, and the 401(k) required minimum distribution, our gross income will be 114 percent of what our preretirement income was in 2017 when we chucked it all in. Slow and steady, that's my advice." | 
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