Expert Tips: How to stop Fear Of Missing Out overspending

The ‘fear of missing out’ (FOMO) is a feeling we’ve all faced at some point. The stress or anxiety that comes from thinking other people are experiencing something you aren’t – nights out, holidays, events, the latest fashion or gadget, etc. And it causes us to spend beyond our means. According to recent data, the reason 21% of Brits overspend when socialising is FOMO. 

What is FOMO, and how does it cause overspending? 

The term ‘FOMO’, coined in the early 2000s, was initially associated with the anxiety of missing out on social events and has since evolved to cover buying habits and lifestyle choices. 

Most people enjoy dining out and socialising when our budget allows. However, constant social media updates from peers and influencers can tempt us to overspend. According to new research, a huge 89% of Brits admit surpassing their monthly budget, with an average overspending of £61 each month (£732 a year). The fear of missing out can lead to excessive spending and accumulating debt, whether it’s the latest technology, fashion trends, or holidays. 

Even during a cost-of-living crisis, FOMO is causing 21% of Brits to prioritise and indulge in non-essential expenses. In 2024, UK adults are expected to spend an average of £1,756 on trips abroad, with 13.6 million having already booked aspects of their holidays – and the primary motivation is, you guessed it, the fear of missing out.

Stephen Clark, founder of Finbri, comments, “Balancing the challenge of FOMO spending requires both awareness and a plan. While it’s unrealistic to completely avoid FOMO-induced expenses, having a well-thought-out budget is necessary for staying on track financially and allows for spending when the urge strikes. Going over budget impacts your financial well-being and highlights the importance of sticking to your budget.”

How to stop FOMO overspending

Here are five practical tips to help navigate the fine line between social expectations and responsible financial choices: 

1. Define your financial goals: 

Clearly outline your short-term and long-term financial objectives. Whether saving for a home, starting a business, or building a retirement fund, specific goals can guide your financial decisions. 

2. Create a budget – and stick to it: 

Develop a realistic budget for your essential expenses, savings, and discretionary spending. This will help you allocate funds responsibly while allowing for social activities and occasional indulgences.

3. Reduce social media exposure: 

Continuously scrolling on platforms such as Facebook, TikTok, and Instagram provides quick satisfaction but significantly fuels FOMO. Targeted ads, influencer endorsements, and friends’ posts can collectively push you towards overspending. Consider reducing the amount of time spent on social media to assist in combatting FOMO.

4. Embrace financial literacy: 

Educate yourself about personal finance to make informed decisions. Understanding the impact of debt, interest rates, and investment options empowers you to navigate financial challenges confidently. Here are three ways to improve your financial literacy: 

• Listen to podcasts: Tune into podcasts for convenient access to financial news while multitasking – whether running errands or working from home. Consider exploring podcasts such as ‘Money Box,’ ‘Money Clinic with Claer Barrett,’ ‘Wake Up to Money’, and more for valuable insights.

• Financial email subscriptions: Receive curated financial news from reputable sources directly to your inbox. These resources provide valuable insights and expert advice on financial matters and lifestyle, guiding your financial journey.

5. Communicate openly: 

Discuss financial goals and constraints with friends and family. Open communication can reduce the pressure to conform to societal expectations and foster a supportive environment for responsible financial choices. 

Balancing social expectations with responsible financial choices

According to a recent study, people’s financial advice to their younger selves includes to ‘live within their means’ (41%), ‘avoid overspending’ (39%), ‘steer clear of debt’ (38%), and ‘save a fixed amount each month’ (36%).

Avoiding FOMO is an individual process that varies among age groups. Some opt to steer clear of or remove social media apps that induce excessive spending. Others engage in open conversations with their friendship circles about financial boundaries. Alternatively, some skip particular costly outings with friends, opting for more budget-friendly gatherings. Ultimately, knowing your financial goals and sticking to your monthly budget will ensure you’re in a better place to avoid FOMO overspending.