why FOMO is making us broke
A money psychologist talks about FOMO and debt
Lately, I’ve been in a bit of a financial reset.
And when I say reset, I mean it. I’ve been reassessing everything, from my spending habits to my relationship with money to even the clothes in my closet. I recently did a massive purge: I donated bags of clothes, gave some to friends, and let go of pieces I once thought I “needed” but never actually wore. A lot of it, I realized, was stuff I bought during the pandemic. Trendy pieces that maybe looked good on someone else, but didn’t reflect who I am, or how I want to feel.
This reset isn’t just about budgeting. It’s deeper than that. It’s about being honest with myself about what I value, what I actually want to invest in, and where my money is going. After a major career pivot over the past couple of years, I’ve had to rethink what financial wellness really means to me. And part of that has been asking: Am I spending money in ways that align with who I am, or am I just trying to keep up?
New data from Ally’s Minds on Money Report shows Gen Z is feeling constant pressure to spend for the sake of social media – even when they can’t afford to. And it’s taking a toll.
Nearly 40% of Gen Z say they’ve gone into debt just to keep up appearances on social media—and most regret it.
Gen Z are the most likely to spend impulsively than other generations, with nearly 1 in 2 (47%) saying they do so on a daily, weekly, or monthly basis.
Nearly a third of Gen Z buys items they saw on social media either immediately or the same day, while roughly 7 in 10 will buy within a week.
Only about 1 in 3 can cover a $1,000 emergency expense without going into debt.
That’s why I wanted to talk to money psychologist Jack Howard and head of money wellness at Ally, who works specifically around money and emotions. In our interview, we get into how FOMO is driving people—especially Gen Z—into debt, what we can do to clean up our money habits, and why aligning your spending with your values is one of the most radical things you can do for yourself.
Because money is meant to be spent, but it’s also meant to be respected. And maybe, that starts with being real about not only what we’re actually chasing, but why.
What does it say about our culture—and particularly younger generations—that many people are willing to go into debt just to keep up appearances on social media?
Likes, comments, shares and follows have become a currency for social capital, causing younger generations to prioritize the dopamine spike that online interactions bring from maintaining appearances—whether or not that reflects their financial realities. Ally’s recent Minds on Money report revealed Gen Z feels the most pressure, with roughly two in five reporting they’ve gone into debt to keep up on social media. For many, the desire to outwardly display a picture-perfect life comes at the cost of money anxiety and instability.
How has the rise of influencer marketing and constant online comparison shifted the way we perceive money, success, and even happiness?
So much of today’s influencer culture has normalized so-called ideal lifestyles, making heavily curated activities seem accessible and affordable to the everyday person. What once required strategic saving and planning, like designer bag splurges, massive clothing hauls, global travel and luxury experiences, now seem like the new norm.
This constant flow of content can slowly start to skew your perception of success and happiness, redefining the value of those experiences to be about visibility and aesthetics, versus personal fulfillment. More than a third (37%) of Gen Z report taking on debt to pay for an item or trip simply to share it on social media, proving the shift in perception and uptick in comparison isn’t just an emotional challenge, but a financial one.
Gen Z is often labeled as impulsive spenders. Is this stereotype fair, or is it more about the environment they're navigating (e.g. algorithms, economic pressures, digital identity)?
Nearly a third of Gen Z said they buy items seen on social media either immediately or the same day, while roughly seven in 10 will buy within a week. However, nearly four of those 10 report buyer’s remorse or a sense of regret afterwards.
It’s easier and more enticing than ever to spend impulsively. Every purchase is right at your fingertips, and seemingly everyone is encouraging you to keep up with the trends, whether that’s your peers or an influencer directing you to their link in bio. Though there’s some truth to the stereotype, this negative habit is largely due to Gen Z’s early exposure to and nonstop navigation of today’s intertwined social media and online shopping environment.
Why does spending—especially on trending items we see online—feel so emotionally satisfying in the moment, even if it leads to regret later?
Spending on the viral item of the moment can trigger a dopamine rush that ultimately helps you feel in control and can give the illusion of status or belonging. However, if that purchase isn’t aligned with your personal values and financial goals the feeling will quickly fade, often revealing a sense of guilt or regret. This can turn into an ongoing emotional rollercoaster if you’re not careful, leading to more impulsive spending to mask those feelings of regret.
With so many people struggling to cover emergency expenses, why do lifestyle purchases still take priority—and how much of that is driven by psychological or societal pressure?
In that same report, just one in three Gen Z consumers said they can cover a $1,000 emergency without incurring debt. Yet, they still often feel the pressure to keep up the image among their followers online and sacrifice financial security for the sake of social media.
Our brains are wired to crave immediate rewards. This concept, known as hyperbolic discounting, explains why we so often tend to value instantly gratifying purchases more than future ones. Buying a new pair of shoes, concert ticket or weekend trip feels immediately exciting, whereas the benefits of saving for emergencies are delayed and uncertain. Social pressure and emotional stress add fuel to the fire, making it easier to justify spending on something fun now rather than saving for a potential future need. The better we understand these influences, the more we can find a balance between enjoying the present and protecting our futures through mindful financial choices.
What are the long-term consequences of making financial decisions based on FOMO or the desire to “keep up,” especially when it starts young?
The financial decisions and behaviors you implement in your 20s and 30s can greatly impact your financial wellness and financial independence in your 40s, 50s and beyond. Over time, the struggle to distinguish your actual needs from social influence can delay important financial milestones, like creating an emergency fund, investing or long-term financial stability. By learning to live within your means and understand your money behaviors, beliefs and values as soon as possible, you’ll be one step further to unlocking financial freedom.
Are there differences in how various generations respond to online spending triggers, and what can we learn from each other?
Older generations tend to be more skeptical of online advertising. They formed their financial habits before the social media boom, which can make them less likely to impulse spend, especially if it’s online. Younger generations like Gen Z have never known a world without 2-day shipping, influencer links and online shopping, so the speed and ease of online shopping feels like second nature. They’re also much more comfortable talking about finances than previous generations, as seen with trends like “loud budgeting” and even “girl math.”
Gen Z and Millennials may benefit from embracing the more mindful spending habits and planning of older generations, while older generations could take a page out of Gen Z’s book to detach feelings of shame around money to foster more open conversations and community with each other.
What are some practical, immediate steps people (especially Gen Z) can take to become more mindful of their spending and build a healthier relationship with money in the digital age?
Unlocking money mindfulness and financial security is more than cookie-cutter advice, and it’s never one-size-fits all. Successfully managing your finances is also about the psychology, behaviors and emotions tied to money. That can include how your family did—or didn’t—discuss finances growing up, misconceptions and traditions society teaches us, or mindless scrolling through social feeds that urge us to keep up with what we see online.
Confront your money stressors. Be aware of how much money you’re spending and the WHY behind your decision. Is it because of FOMO or pressure to keep up with trends? Are you “treating yourself” after a rough week?
Identify the emotions you feel when shopping. Feelings that may come up are the need to look your best, excitement of new things or self-expression. Explore these feelings and determine if they can be satisfied through an experience, adventure or investment into a social or romantic relationship instead of shopping.
Explore different resources to find what works for you. Consider a range of resources and tools that were created with today’s environment in mind, like Ally’s free Money Roots program. The interactive financial wellness program is based in money psychology and helps unpack “the why” behind money habits to ultimately build better ones.
Create a plan for finances moving forward. Start practicing conscious spending. We should be able to spend extravagantly on things we want, but we have to make cuts in other areas. This works best when you have a practical budget to reference, helping you prioritize purchases to avoid feeling guilty about spending.
I loved this chat with Jack, and I really think this paragraph drove it home for me:
Unlocking money mindfulness and financial security is more than cookie-cutter advice, and it’s never one-size-fits all. Successfully managing your finances is also about the psychology, behaviors and emotions tied to money. That can include how your family did—or didn’t—discuss finances growing up, misconceptions and traditions society teaches us, or mindless scrolling through social feeds that urge us to keep up with what we see online.
So much of our money habits are subconscious, and it’s up to us to be more mindful of how and why we spend our money on the things we do. This is something I’m definitely working on. Because, remember, friends, money wellness is a radical act of self-care. Our spending habits reflect our self-worth and self love.
Thanks for being here!
Love, Brie xoxo
