Shopping: FOMO economy: Social media is driving Gen Z into debt

Why it is the topic trending:

• Rising Debt Among Gen Z Due to Social Media Pressures: The article highlights a significant issue of young adults, particularly Gen Z, accumulating debt because of the pressure to make purchases (both material goods and experiences) they see on social media to present an ideal online image. This financial consequence of social media use makes it a relevant and concerning topic.

• Modern Adaptation of "Keeping Up with the Joneses": The article connects the historical concept of social comparison to the digital age, showing how social media has amplified the pressure to showcase a desirable life on a global scale. This evolution of a well-known phenomenon in a new context makes it a trending discussion.

• Expert Insights and Research Findings: The article cites a new survey from Ally Financial and includes commentary from experts like Jack Howard, the bank’s head of money wellness, lending credibility and data to the topic, thus raising its importance and making it newsworthy.

Overview:

This Salon article delves into the phenomenon of the "FOMO economy," explaining how social media is driving Gen Z into debt. The pressure to document an exciting and fulfilling life online, akin to a digital version of "keeping up with the Joneses," is leading young adults to make impulsive purchases of items and experiences solely or partly to share them on social media. Research from Ally Financial indicates a significant percentage of Gen Zers are taking on debt for this reason, often regretting these purchases later. The article explores the psychological impact of this pressure, the feeling of missing out (FOMO), and the potential consequences for the financial well-being of this generation.

Detailed Findings:

• The phrase “keeping up with the Joneses” has evolved from comparing oneself to local neighbors to comparing with people worldwide via social media.

• Social media creates pressure for young adults to document every aspect of their lives to present a fully-formed digital persona.

• New research from Ally Financial’s “Minds on Money” survey found that 40% of Gen Zers regularly take on debt for impulsive purchases seen on social media.

• An equal number of Gen Zers admit these purchases are made, in part, to be shared on social media.

• Many Gen Zers who make purchases for social media later regret them.

• Benjamin Fields, a 27-year-old Ph.D. candidate, feels pressure to spend recklessly to keep up with the seemingly successful lives portrayed on social media.

• Juliette Haas, a 23-year-old wellness influencer, acknowledges even those working in industries that drive consumer spending are susceptible to social media’s influence on purchases.

• Social media has expanded the definition of public presentation, requiring documentation of a wide range of activities and possessions.

• The pressure isn’t just for big-ticket items but also everyday activities like brunch or attending a workout class, driven by the fear of missing out (FOMO).

• Jack Howard from Ally Bank highlights that many young people are incurring debt with the primary goal of posting on social media.

• Howard also points out the paradox that these documented experiences might not offer the same mental health benefits as unplugged experiences, contributing to anxiety.

Key success factors of product (trend):

• Shareability and Visual Appeal: Items or experiences that are highly photogenic and likely to generate positive engagement on social media are prioritized. This includes trendy fashion items, aesthetically pleasing food and drinks, travel destinations, and popular events.

• Perceived Social Validation: Acquiring and sharing these products or experiences is often driven by the desire for social approval and validation from online peers. The feeling of "fitting in" or appearing to have a desirable lifestyle is a key motivator.

• Connection to Identity and Aspirations: Certain purchases are seen as markers of identity or steps towards an aspirational lifestyle portrayed on social media, making them feel necessary to project a desired image.

Key Takeaway:

The intense pressure to showcase a perfect life on social media is leading a significant portion of Gen Z to accumulate debt through impulsive purchases made specifically for online sharing, potentially sacrificing genuine experiences and contributing to anxiety.

Main trend:

Social media is driving Gen Z into debt through the pressure to document and share an ideal life online, fueling a "FOMO economy."

Description of the trend:

The "FOMO Economy" and Digital "Keeping Up with the Joneses": This trend describes the phenomenon where social media creates an environment of constant comparison and the fear of missing out (FOMO), pushing young adults, particularly Gen Z, to make impulsive purchases of goods and experiences primarily to document and share them online. This digital adaptation of "keeping up with the Joneses" has expanded the scope of social comparison from local neighbors to a global network, often leading to financial strain and debt.

What is consumer motivation:

• Fear of Missing Out (FOMO): Seeing peers and influencers online engaging in various activities and acquiring certain possessions creates anxiety and the feeling of being left out, motivating similar purchases to avoid missing out.

• Desire for Social Validation and Approval: Sharing experiences and purchases on social media is often driven by the need for likes, comments, and positive feedback, which provides a sense of social acceptance and status.

• Pressure to Curate an Ideal Online Persona: Young adults feel pressure to present a flawless and exciting version of their lives online, leading to purchases that enhance this curated image.

• Keeping Up with Perceived Norms: Social media can create a distorted perception of what is normal or expected in terms of lifestyle and consumption, pushing individuals to spend to align with these perceived norms.

What is driving trend:

• Ubiquity of Social Media: The pervasive nature of social media in the daily lives of Gen Z means they are constantly exposed to curated and often idealized depictions of others' lives.

• Algorithmic Content Amplification: Social media algorithms often prioritize and amplify content that showcases exciting experiences and desirable possessions, further fueling FOMO and the desire to emulate.

• Influencer Culture: The rise of social media influencers who promote specific lifestyles and products creates a powerful aspirational pull for their followers.

• Culture of Documentation: The expectation to document and share experiences online has become deeply ingrained in the social norms of younger generations.

• Comparison Culture: Social media inherently fosters a culture of comparison, where individuals constantly evaluate their lives against the often-highlighted successes and experiences of others.

What is motivation beyond the trend:

• Genuine Enjoyment of Experiences: While the trend focuses on sharing, the underlying motivation for some purchases might still include the genuine enjoyment derived from travel, events, or owning certain items.

• Self-Expression and Identity: Purchases can also be motivated by a desire to express one's personal style, interests, and identity, even if these are also shared online.

• Building Real-Life Connections: Some experiences might be purchased to facilitate real-life social interactions and strengthen relationships, even if documented online.

Description of consumers article is referring to:

The consumers the article primarily refers to are young adults, specifically Gen Z, who have grown up with smartphones and social media as integral parts of their lives. Based on the article, we can infer the following:

• Who are them: They are individuals highly engaged with social media, feeling pressure to present a desirable online image and fearing they are missing out on experiences their peers are having.

• What kind of products they like: They purchase a range of items and experiences, including concert tickets, vacations (especially those deemed "Instagrammable" like European trips), trendy clothing items (like Coach's oversized bags), beauty products (like peptide masks), and social outings (like drinks at a bar). The common thread is their shareability and potential to enhance their online persona.

• What is their age?: The article explicitly mentions Gen Z and provides examples of a 27-year-old and a 23-year-old, indicating the focus is on this young adult demographic.

• What is their gender?: The examples in the article include both male (Benjamin Fields) and female (Juliette Haas) individuals, suggesting the trend affects both genders.

• What is their income?: The article highlights instances of taking on debt, suggesting that these consumers may not always have readily available funds for these impulsive purchases. The example of a Ph.D. student feeling pressure to spend indicates that even those with limited incomes can be susceptible.

• What is their lifestyle: Their lifestyle is characterized by a significant presence on social media and a perceived need to participate in and document a wide range of activities and acquire certain possessions to maintain a desirable online profile.

• What are their category article is referring shopping preferences: Their shopping preferences are often driven by the desire for shareability and the perceived social value of the purchase online. Impulsivity is a key characteristic, with purchases frequently made based on what is seen on social media, sometimes at midnight or without careful consideration.

• are they low, occasional or frequent category shoppers: The fact that 40% are regularly taking on debt for these purchases suggests they are likely frequent shoppers in categories that lend themselves to social media sharing, such as fashion, beauty, experiences, and dining.

• What are their general shopping preferences-how they shop products, shopping motivations: They are heavily influenced by social media content, including ads and the posts of peers and influencers. Their shopping motivations extend beyond functional needs or genuine enjoyment to include the desire for social validation and the fear of missing out.

Conclusions:

The pervasive influence of social media has created a "FOMO economy" where Gen Z feels immense pressure to portray an ideal life online. This pressure is driving a significant portion of this generation into debt through impulsive purchases made to gain social validation and avoid the feeling of missing out. This behavior, while understandable in the context of social media's pervasive presence, can have detrimental effects on their financial and mental well-being.

Implications for brands:

• Opportunity to Target FOMO: Brands can leverage the fear of missing out by strategically showcasing their products and experiences on social media and creating a sense of urgency or exclusivity.

• Risk of Contributing to Debt: Brands should be mindful of the potential negative consequences of encouraging impulsive spending among young consumers who may be susceptible to social media pressures and debt.

• Importance of Authenticity: While leveraging trends, brands should also strive for authenticity and avoid contributing to unrealistic portrayals of life that fuel harmful comparison.

• Potential for "Anti-FOMO" Marketing: Brands could also consider campaigns that promote mindful consumption and being present in the moment rather than constantly chasing experiences for online validation.

Implication for society:

• Need for Digital Literacy and Financial Education: There's a growing need to educate young people about the curated nature of social media and the potential financial pitfalls of chasing online validation.

• Impact on Mental Health: The constant pressure to present a perfect life online and the associated anxiety of missing out can have negative consequences for the mental health of young generations.

• Shifting Social Norms: Society might need to re-evaluate the emphasis placed on online presentation and validation, fostering a culture that values authenticity and well-being over perceived perfection.

Implications for consumers:

• Increased Risk of Debt: The pressure to keep up with digital "Joneses" can lead to significant financial burdens and long-term debt.

• Potential for Regret and Dissatisfaction: Purchases made solely for social media often lead to regret and might not contribute to genuine happiness or fulfillment.

• Lost Opportunities for Genuine Experiences: The focus on documenting life online can detract from the ability to be present and fully enjoy experiences.

• Increased Anxiety and Reduced Well-being: Constantly comparing oneself to others online and feeling the need to keep up can contribute to anxiety, low self-esteem, and a diminished sense of well-being.

Implication for Future:

• The "FOMO economy" driven by social media is likely to persist as long as these platforms remain central to social interaction and self-presentation.

• There might be a growing counter-movement towards more authentic and less performative online behavior, as well as a greater awareness of the negative impacts of constant comparison.

• Financial institutions and educators may increasingly focus on providing resources and guidance to help young people navigate the financial pressures of the digital age.

Consumer Trend (name, detailed description): Debt-Fueled Digital Display: Young consumers, particularly Gen Z, are increasingly driven to make purchases and engage in experiences primarily to document and share them on social media, often incurring debt to maintain a perception of an ideal online lifestyle.

Consumer Sub Trend (name, detailed description): Impulsive Purchases for Online Validation: A significant portion of young adults are making unplanned and sometimes unnecessary purchases of items and experiences based on what they see on social media, motivated by the desire for social approval and to avoid missing out.

Big Social Trend (name, detailed description): The Performative Self Online: Social media has fostered a culture where individuals feel pressure to constantly perform an idealized version of themselves for public consumption, influencing their choices and behaviors in the real world.

Worldwide Social Trend (name, detailed description): Global Comparison and the Amplified Standard of Living: Social media has expanded the scope of social comparison beyond local communities to a global scale, leading individuals to compare themselves to a much wider and often curated range of lifestyles and achievements.

Social Drive (name, detailed description): The Need for Social Belonging and Validation: Humans have a fundamental need for social connection and acceptance. In the digital age, this drive is heavily influenced by online interactions and the validation received through social media.

Learnings for brands to use in 2025:

• Acknowledge the "FOMO Economy": Understand the pressures consumers, especially Gen Z, face to document their lives online and how this influences their purchasing decisions.

• Use Social Media Strategically: Leverage social platforms to showcase products and experiences in ways that tap into the desire for shareability and social validation.

• Consider Ethical Implications: Be mindful of the potential to encourage overspending and debt among vulnerable consumers. Balance marketing efforts with a sense of social responsibility.

• Highlight Experiences and Shareable Moments: Focus on marketing the potential for your products or services to create memorable and shareable moments that align with consumers' desire to document their lives.

• Explore Authenticity in Marketing: While leveraging the desire to share, also consider campaigns that promote genuine experiences and well-being over purely performative online behavior.

Strategy Recommendations for brands to follow in 2025:

• Create Visually Appealing and "Instagrammable" Products/Experiences: Design offerings that are aesthetically pleasing and likely to be photographed and shared on social media.

• Run Social Media Campaigns that Encourage User-Generated Content: Encourage consumers to share their experiences with your brand using specific hashtags to increase visibility and create a sense of community and FOMO among non-users.

• Partner with Influencers Known for Curated Lifestyles: Collaborate with social media influencers whose content resonates with your target audience's desire to portray an ideal life online.

• Offer Exclusive or Limited-Time Experiences/Products: Create a sense of urgency and exclusivity to capitalize on FOMO and drive immediate purchases.

• Consider Developing Augmented Reality (AR) Filters or Social Media Features: Enhance the shareability of your products or experiences by providing tools that consumers can use to create engaging online content.

Final sentence (key concept) describing main trend from article (which is a summary of all trends specified), and what brands & companies should do in 2025 to benefit from trend and how to do it.

In 2025, the "FOMO economy" continues to drive Gen Z to spend on shareable experiences and items to cultivate an ideal online persona, and brands should strategically leverage social media and the desire for validation by creating visually appealing, buzzworthy offerings while remaining mindful of the potential financial strain on consumers.

Final Note:

• Core Trend: FOMO-Driven Debt: The primary trend is the accumulation of debt by Gen Z due to the pressure to make purchases for social media validation.

• Core Strategy: Leverage Shareability and Social Validation: Brands should tap into consumers' desire to document and share their lives online by creating visually appealing and buzzworthy offerings.

• Core Industry Trend: Influence of Social Media on Consumer Behavior: Social media continues to be a dominant force shaping how young consumers perceive value and make purchasing decisions.

• Core Consumer Motivation: Seeking Social Validation and Avoiding FOMO: The primary driver for these purchases is the desire for approval and the fear of missing out on experiences their peers are showcasing online.

Final Conclusion:

The "FOMO economy" presents a complex landscape for both consumers and brands. While the desire to share and connect online is a powerful motivator, it can also lead to negative financial and mental health outcomes. Brands need to navigate this trend responsibly, understanding the underlying motivations while being aware of the potential consequences for their young consumer base.

Core Trend Detailed:

The core trend is the phenomenon of the "FOMO economy," wherein social media creates a pervasive fear of missing out (FOMO) among young adults, particularly Gen Z. This fear drives a significant portion of this demographic to make impulsive purchases of experiences and material goods primarily to document and share them online, leading to a cycle of spending and often resulting in debt. This digital adaptation of "keeping up with the Joneses" has amplified social comparison and shifted the focus of consumption towards creating a desirable online persona.

Key Characteristics of the Core Trend:

• Social Media Driven Pressure: The primary driver is the constant exposure to curated and often idealized portrayals of life on social media platforms, creating a sense of inadequacy or missing out.

• Impulsive Spending for Online Validation: A key characteristic is the tendency to make unplanned purchases of items and experiences (ranging from concert tickets and vacations to everyday outings) with the primary motivation of sharing them online to gain social approval.

• Fear of Missing Out (FOMO): The underlying psychological element is the anxiety and discomfort of feeling excluded from experiences or trends that are being widely shared on social media.

• Debt Accumulation: A significant consequence of this trend is the increasing number of young adults, particularly Gen Z, taking on debt to finance these socially driven purchases.

• Potential for Regret: Many individuals who make purchases solely for social media validation later experience regret, highlighting the lack of intrinsic value in these transactions.

Market and Cultural Signals Supporting the Trend:

• Ally Financial Survey Findings: The "Minds on Money" survey revealing that 40% of Gen Z regularly take on debt for social media-driven impulsive purchases provides strong data supporting this trend.

• Expert Testimony: The insights from Jack Howard, Ally Bank’s head of money wellness, emphasizing that debt is being incurred with the sole purpose of posting on social media, lend credibility to the trend's significance.

• Personal Accounts: The examples of Benjamin Fields and Juliette Haas illustrate the personal experience of feeling pressure to spend and participate in activities to align with the perceived lifestyles on social media, even among those who are aware of these dynamics.

• Cultural Emphasis on Documentation: The article points to a societal expectation for young people to document and share virtually every aspect of their lives online, reinforcing the need to make shareable purchases and engage in shareable activities.

• Popular Culture References: The comparison of social media to a modern "house-with-a-picket-fence" and references to sought-after cultural experiences (like attending popular concerts) highlight how these elements have become markers of a desirable online presence.

How the Trend Is Changing Consumer Behavior:

• Prioritization of Shareability: Purchase decisions are increasingly influenced by the potential for the item or experience to be visually appealing and well-received on social media.

• Increased Impulsivity: The fear of missing out often leads to spontaneous and unplanned purchases driven by what is currently trending or being showcased online.

• Shifting Value Perception: The value of a product or experience is sometimes weighed more heavily on its "Instagrammability" or "TikTokability" than on its inherent quality or personal enjoyment.

• Acceptance of Debt for Social Standing: There is a growing tendency among some young adults to view incurring debt for social experiences or trendy items as an acceptable or even necessary part of maintaining their social image online.

• Potential Disconnect from Genuine Experience: The focus on documenting and sharing experiences can detract from the ability to be present and fully engage with those experiences, potentially diminishing their actual value.

Implications Across the Ecosystem:

• For Brands and CPGs: Opportunity to leverage FOMO in marketing by showcasing desirable and shareable products and experiences on social media. However, they also face the ethical consideration of potentially contributing to consumer debt.

• For Retailers: Need to adapt to the demand for visually appealing and "Instagrammable" products and create retail environments that encourage social sharing.

• For Consumers: Increased risk of accumulating debt through impulsive purchases made for online validation. Potential for regret and a disconnect from the genuine enjoyment of experiences due to the focus on documentation. May also lead to anxiety and reduced well-being from constant social comparison.

Strategic Forecast:

The "FOMO economy" is likely to remain a significant driver of consumer behavior among young adults as long as social media continues to play a central role in their social interactions and self-presentation. We may see a growing awareness of the negative consequences of this trend, potentially leading to a counter-movement towards more mindful consumption and authentic online behavior. However, the ingrained nature of social media in this generation's lives suggests that the pressure to present an ideal online persona will likely persist, continuing to influence spending habits.

Final Thought:

The "FOMO economy" highlights the powerful influence of social media on the purchasing behaviors of Gen Z, driven by a deep-seated desire for social validation and the fear of being left out. This trend, while providing opportunities for brands, also carries significant implications for the financial and mental well-being of young consumers who are increasingly incurring debt to keep up with the curated realities of online life.

Source: https://www.salon.com/2025/06/01/in-the-fomo-economy-social-media-drives-gen-z-into-debt/