Over the past several months a family has been reporting their exploits on social media from various countries in the Far East. In their early forties, they have embarked with their young son on an ambitious year-long round the world adventure.
The typical reaction to their posts echos findings from Schwab’s 2019 Modern Wealth Survey under the title, FOMO (Fear of Missing Out) fuels American spending. The survey of 1,000 Americans found that nearly two-thirds of respondents “wondered how friends can afford expensive experiences posted on social media.” Just over one-third admitted they “spent more money than they could afford to participate in experiences with friends.”
It appears that this modern form of “keeping up with the Joneses,” particularly in highly visible (and post-worthy) experiences, is widespread and may be having a significant impact on spending and, perhaps more important, savings habits. Wealth managers, particularly those whose business includes serving the mass affluent, should be conscious of the new social dynamics that influence their clients’ financial behaviors and should align their financial planning offer and process to reflect this awareness.
Schwab 2019 Modern Wealth Survey