There are very few people in the developed world who haven’t used social media at least once or those who don’t have an account on one of those sites. Social media helps us maintain our relationships, discover new things, access entertainment and promote ourselves. The fear of missing out on those things motivates people to have social media accounts. Even if social media accounts don’t have an inherent monetary value, they can be used to improve a person’s financial situation. But is social media actually making you lose money?
Effect of social media on job prospects
We all have seen how a person has have lost a job because of social media posts (1, 2). Sometimes there are people who really had it coming either because of really bad behaviour or actually thrashing their workplaces online. It’s easy to laugh at obvious mistakes like those.
It gets harder when we see cases people getting fired because of opinions (1,2). Events like these make us question the decisions of employers and provoke heated discussions. After all, the prevailing thought is that employees should be judged only by their ability to do their work. However, potential customers may shy away from places that employ people with socially unacceptable behaviours or opinions. So where is the line between freedom on social media and actually harming your employer?
Some advice veers on the side of caution: don’t say things on social media that you couldn’t say in real life. Also, for people in important positions, it is advised to have private social media channels or just to post work-related posts.
Other advice is for the daring: posting should be limited just to the things that are protected by free speech. Obviously, it does not include hateful or violent opinions. But what for one person seems like free speech, for others could seem like harassment.
Therefore, let’s leave the examining of the line between freedom on social media and actually harming your employer for HR professionals and talking heads on the Internet. With how fast the world and acceptable opinions are changing, no one is safe from an Internet kangaroo court.
However, every social media user should analyse whether social media is helping or harming their earnings. Also, whether they are using social media to minimize potential harm and maximize potential advantages.
One area where social media is definitely making you lose in terms of its effect on earnings, is any talk about earnings, the amount of work you’re doing and your exact responsibilities.
Talking about earnings is an obvious no-no. When you’re eventually going to negotiate with a new employer, you won’t have the advantage of having more information than the employer. As discussed in Financial life hacks, white lies related to earnings are very common and very useful. If your future employer knows how much you have been earning, you will be in a much more difficult position to negotiate a pay raise.
Discussing how much (or how little) work you’re doing is a double-edged sword. Obviously, showing how little work you’re doing won’t make your boss happy. Discussing your hard work may benefit a worker in the short-term. An employer may notice the effort a worker is putting out through social media (unlikely) or a future employer may be impressed with the work ethic of a potential hire (more likely).
Nevertheless, too many posts related to the hours you’re putting in at work may also backfire. Think logically. If an employee is always having to put in extra hours and effort at work, does that not mean that the work is too difficult for the employee? That’s an impression some “hard workers” risk gaining.
Painstakingly detailed posts about your exact work will just bore your friends and family members you interact with on social media. However, same as talking about your exact earnings, discussing your exact responsibilities at work won’t help you when you’re looking for a new job. If a worker’s CV looks better than their posts related to work responsibilities, at very least, the worker will raise suspicions.
And deleting disadvantageous posts or whole accounts won’t help. Search engines, Internet archives and other services archive every bit of information that is put out on the Internet. And public social media account isn’t an exception.
Scientific studies say that humans prefer familiar faces (1,2). We won’t dig into the evolutionary biology behind it, but it’s safe to say that there are ways to use this fact for financial benefits.
One of them is by working to become more “familiar” to the right people on social media. The times are gone when you could get a job just with a right conservation with the right person. Now, connection-making has moved into the digital world. Actual networking, especially if it’s done in the real life, takes up too much time and effort. Becoming familiar to decision makers in your work sphere is a great way to advance your career and achieve bigger earnings.
For example, we have artists A and B. Both have the same skill level, and both work in the same sphere. However, artist B has a fairly active Twitter account with tweets related to the industry and local events. A and B are applying to the same position in the same company. An interview is the next step in the application process.
Even if the people interviewing don’t follow B on social media, they’d have seen a picture of artist B in the passing. Or, by browsing through local Twitter hashtags, they would have seen the work of artist B. That means that in the subconscious, artist B has been categorized as “familiar” in the brains of the interviewers. If A and B have the same qualities in all categories relevant to the new job, the familiarity of artist B may give him or her an edge in getting the job.
To maximize the effect of familiarity on social media, one doesn’t have to post every day or to even to show their face. Posting something relevant to the local industry and showcasing your best work weekly or every other week is enough.
Making new connections is a given on social media. Even without applying active strategies to increase followers, your follower count will increase. Not using this advantage to advance in your own career would be a disservice to yourself. Simple posts and positive updates related to your work on a personal account or a LinkedIn profile for are easy ways to make new work connections.
Even if only 10 or 20 people start following you, that’s still better than 0. 10 new connections are 10 more opportunities for work and job prospects. You never know if a new follower knows someone from a company you’ll be applying in a year.
Effect of social media on spending
Social media has given people platforms to connect easily, while taking their data and their readiness to accept personalized marketing. Whether this exchange is fair, only the future will show. Nevertheless, social media affects the way we spend money and how much money we are willing to spend. Marketing on social media sites is just one reason why your spending is changing because of the use of social media.
Changing your own spending patterns
The most obvious way how social media affects personal finances is the change in spending patterns. When you use social media, you not only get exposed to direct marketing, but also to more brands and their imagery.
Direct marketing may seem innocuous and easy to ignore, but it has an effect. According to studies (1,2), you are influenced by the advertising you see on social platforms. This type of advertising may influence you to buy things you don’t need or to change the products you already buy to products suggested by advertising.
One way products and brands indirectly advertise is through shared posts by our friends on social media. We can’t control this type of advertising. People become easy victims of consumerism by subscribing to brands on social media platforms without the thought of what the consequences of those actions will be.
By getting exposed to advertising from brands everyday on social media, users become more loyal to brands. More loyalty is equal to a higher liking to share these brands. The more people share, the more other people are likely to do the same. And the cycle goes on and on.
Let’s not forget influencers. These e-celebs are a human face for brand, yet advertising through them really works. If you’re following any influencers, be aware that every product they show is likely sponsored.
The only way to totally avoid getting influenced by covert advertising is to not have any social media accounts. If it’s not possible, using ad-blockers and muting friends who share brands they like may help. If nothing else works, just knowing how you’re influenced will help you make rational choices when you’re spending money.
Spending more money on status items
There’s a saying floating around the Internet. It says that what we see on social media from our friends and acquaintances is a highlight reel, while our own life can be compared to behind the scenes footage. Although this saying doesn’t fit every person, the general idea behind it is true.
Social media is the place to show the best side of us, and showing off status items is one of the ways to do it. Although the frequency of status items posts vary in different social classes, they’re still inescapable. The lower classes post status items associated with the middle class lifestyle. The middle class tries to appear trendy and “in-the-know” with their status items. And the upper class tries to signify the ability to afford the most exclusive items with their posts.
No matter what social class you belong to, you could still fall into the trap of status items. You could be tempted to compete with your friends. Or, a post with a status item from an acquaintance could be the final push to buy that item.
Most status items, apart from real estate and rare collectibles, are liabilities that depreciate in value. Some liabilities may help you build your wealth. However, status items won’t. That’s why it’s important to recognize how some social media posts indirectly influence your decisions to acquire liabilities.
Oversharing is advertising?
The stereotypical friend who constantly posts on social media and overshares is probably the most covert way that is changing your spending patterns. Studies show (1,2), that we trust the opinions of our friends and that we value them. That includes their posts about the new cafe they visited or the chocolate they’re eating.
And after a post or two, you also want to try the chocolate your friend has posted an opinion about. You wouldn’t have bought that chocolate if your friend hadn’t had written about it. Wanting to conform and trusting the opinions of our close friends helps us build stronger relationships. However, social media inadvertently takes advantage of this, and makes you more likely to make certain purchases.
While the intentions of oversharing friends aren’t harmful, our conscious still remembers those posts. Being aware how we perceive opinions of our friends will help to make more rational decisions.
A tool or an uncontrollable influence?
For some, social media is a tool to earn money, advance in their careers and make new connections. For others, social media is a bad influence on their career prospects and spending habits.
Social media will only make a person lose money if they are not conscious of their surroundings (in this case, digital). Keeping up-to-date with the knowledge of psychology and personal finances will help to avoid losing money. And Money Bear Club is there to help you!
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