According to the 2019 Modern Wealth Survey conducted by Charles Schwab, millennials between the ages of 23 and 38 are farther into debt than previous generations. Data gathered from the survey shows most millennials are living paycheck to paycheck due to massive debt and out of control spending.
When it comes to out of control spending, survey respondents say it’s social media platforms and not people that are to blame for being the biggest “bad” influence when it comes to managing expenses. In fact, a third of respondents admit that their spending habits have been directly influenced by images and experiences they see from friends and followers on various social media platforms.
Survey responses revealed that three out of five Americans care more about how their friends spend money as opposed to how much money they save. The same number of people admit that they don’t actually understand how their friends are able to afford many of the things they share on social media, such as going on extravagant vacations, eating expensive meals, and attending exclusive events.
Speaking about the findings from the survey, executive vice president and head of Schwab Investor Services, Terri Kallsen, said:
“The burden to ‘keep up with the Joneses’ has been part of our culture for decades, but it appears that social media and the fear of missing out (FOMO) have increased the pressure to spend. Spending is not the enemy, but when we allow social pressure or other forces to lure us into spending beyond our means, it can impact long-term financial stability and become a larger problem.”
Other important findings from the survey worth noting include:
- 59% of Americans live paycheck to paycheck.
- 44 % of Americans typically carry a credit card balance.
- Only 38% of Americans have built up an emergency fund.
- The average American spends close to $500 a month on non-essential items.