It is human nature to judge your financial health against your friends. Just know they probably aren’t giving you a full accounting.
How we measure up against our friends and peers has an outsize effect on our financial perception, economists and researchers say—especially as people spend more time scrolling social media. These comparisons can make our finances seem inadequate even when things are going fairly well.
This effect is playing a part in the disconnect leading many consumers to feel dour about the economy despite several promising factors, such as cooling inflation, a strong labor market and a U.S. economy that grew 3.1% over the past year.
In some ways, the more downbeat viewpoint reflects financial realities. Millions of Americans are paying more in rent, while food is taking up a larger share of income than it has in decades. But the disconnect is also exacerbated by our friends and the way many of them present only the rosiest view of their finances and families on social media.
A recent report from Edelman Financial Engines surveyed more than 2,000 people regarding their attitudes about their wealth. Around a quarter said they feel less satisfied with the amount of money they have because of social media, and a third said they have spent more than they could afford to “keep up with the Joneses” on Instagram and other apps.