27 September 2023

Money FOMO: How to feel better about finances

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Kelly Simpson* presents action steps people can take to get over their finance-related fear of missing out (FOMO).

FOMO sucks at the best of times – but when it comes to our finances, it can make us behave in irrational ways.

We’ve got some actions you can take if it gets to you.

Back in the day – April 2011 to be more precise – a psychologist named John M. Grohol introduced a concept he called FOMO addiction.

FOMO addiction, he explained, is ‘the fear of missing out on something or someone more interesting, exciting or better than what we’re currently doing.’

Ten years later, this is a feeling that still strikes us daily, especially when it comes to money.

You’re scrolling through Twitter and BAM! There’s a new meme stock going to the moon.

Open Instagram and some dude you don’t even follow is telling you it’s almost too late to join the boom but you should definitely still act now.

Turn on the TV and it’s all about how much a house costs, and everybody seems to own at least three.

Then you start to think that maybe that meme stock could at least buy you your first house?!

What to do when FOMO gets to you

When you’re trying to get ahead, it’s easy to think you should be doing what the crowd seems to be doing, and if you’re not, it must mean you’re falling behind.

A lot of this can be attributed to social media — after all, you can’t have a meme stock if you don’t have memes.

And the democratisation of financial information is a fantastic thing.

It used to be that only the bigwigs could see up-to-the-moment stock prices — everyone else had to look in the newspaper to see the stock market’s closing prices from the previous day.

But instant access to information can make everything feel much more urgent.

If everything seems urgent and nothing is certain, and you feel like you should make a decision anyway, it might mean you’re experiencing financial FOMO.

Here are some actions you can take that could help you get out of it.

  1. Consider the facts.
  2. Think about what you actually want.
  3. Make a strategy.
  4. Fix your feeds.
  5. Remember how far you’ve come.
  6. Don’t make a bad situation worse.
  1. Consider the facts: who are you comparing yourself to?

It’s easy to feel like you’re falling behind, or that others are getting ahead of you, but feelings aren’t always grounded in facts.

The first thing to do is to figure out where you actually are, and how your unique life circumstances can make comparison impossible.

Think about the people who make you feel FOMO and figure out how you’re different to them.

Have they been in the workplace longer than you? Do they have different priorities?

Do you really know what you’re comparing yourself to, or are you just guessing?

For example: Are you comparing yourself to someone who lives in a different place?

A statistic like the one from September 2020 from the ABS that says the average Australian weekly housing cost (which includes mortgage, rent and rates repayments) is $305 per week might make you feel like you’re missing out on cheaper rent.

But do you live in a capital city? As soon as you do, it blows out.

In 2020 the median house rental price was $540 in Sydney, while units were $495, according to Domain.

Action step: Get some perspective.

Think about the people you’re comparing yourself to, and consider whether you really know what their habits are or if you’re just guessing.

Research the money habits of people who are your age or in the same life stage as you, or check out our Real Money Talks and learn about how people are really living.

  1. Think about what you actually want

Sometimes we can compare ourselves to others but when we really think about it, we don’t actually want what they have.

Take professional sportspeople as an example.

Sure it would be fun to play a sport in front of thousands of people, and earn a lot of money and adulation — but would you really want the pre-dawn training, extensive travel time, and other sacrifices that come with it?

Would that make it worth it? Or is it enough to sit on the sideline and watch the game with your friends?

It can be the same when your friends start buying houses and settling down.

It might feel like that means you should too — but are you actually ready to?

Do you want to commit to staying in the same place and paying off a mortgage? Or would you rather keep renting and experience living in a few places first?

Or maybe you’re the friend with the mortgage comparing yourself to people who have more disposable income than you do.

Would you really prefer that over the stability you might now feel?

Action step: Ask yourself what you really want.

Picture yourself in five years from now.

Think about where you actually want to live, work, and spend your free time. Chances are you’re on track for it, or can be with just a few tweaks.

And if you’re not? Now you know what you’re aiming for.

  1. Make a plan, and then zoom out to see where you are

Lewis Carroll apparently said that if you don’t know where you’re going any road will get you there. We tend to agree.

Everything can seem like an exciting option when you’re not committed to a plan.

The tried and tested approach of budgeting, and doing your research to buy and hold stocks that you understand is rarely going to have the same day thrills that a meme stock or cryptocurrency might.

Especially when we see money as being the vehicle and shortcut to our dreams coming true.

This is why having a strategy is important.

It puts you on track to reaching your goals and helps you course correct.

We’ve got heaps of information on how to plan and budget, but the important thing to remember is that when you know where you’re going and have a plan for how to get there, you’re more likely to arrive.

Action step: Create or review your financial plan.

Put some goals in place, whether it’s for a house deposit, a new car, or starting your own business.

Think about how far you’ve come, and remember you’re not starting from scratch.

It might not feel like it but you could be closer to meeting your goals than you realise.

  1. Fix your feeds

The accounts you follow on social media can have more of an impact than you know.

Instagram, for example, is seen as a key advertising channel for brands and influencers who dedicate their careers to convincing you to part with your hard-earned money.

It’s not a stretch to imagine it might make you feel like you don’t have enough of it.

But it’s not just influencers. It’s hard to see pictures of friends and family who are living it up, when you’re eating two-minute-noodles and waiting for payday.

It can leave you feeling like you’re falling behind, or that they’ve got the shortcut to getting ahead.

Action step: Scroll through the accounts and hashtags you follow on your social networks of choice.

Consider how you feel both when you’re scrolling, and afterward.

Think about unfollowing or muting any that make you feel bad, or limiting the time you spend if it’s a problem for you.

  1. Celebrate your wins

Celebrating your wins is key to staying the course.

“Your journey of achievement is sometimes more important than the end goal,” according to psychotherapist Martina Witter.

You can think about it this way: you may not have enough for that house deposit yet.

But do you have a new budgeting habit, or have a plan that tells you when you’re going to get there?

Setting healthy financial habits are wins in themselves and worth celebrating.

Action step: Think about all the achievements you’ve already made along the way.

Life can be hard, and we think it’s important to celebrate every success you have.

  1. If you’re under financial pressure, don’t make a bad situation worse

Money stress and money anxiety are real and can be debilitating. If you’re worried about your financial situation, we encourage you to reach out to someone to help take the pressure off.

Here are some resources that can help.

National Debt Helpline

Phone: 1800 007 007: The National Debt Helpline is available from 9.30am to 4.30pm, Monday through Friday. Calls from mobile phones may incur a fee from the mobile phone carrier.

You can also visit the National Debt Helpline website for information and resources.

National Legal Aid

If you’re facing legal action over your debts, you may be able to receive free legal advice from a community legal centre. Visit National Legal Aid for more information.

Lifeline Crisis Support

Phone: 13 11 14: If you need urgent crisis support, call Lifeline’s 24/7 hotline.

*Kelly Simpson is a contributor at Spaceship.

This article first appeared at spaceship.com.au.

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