Charles Schwab and Company recently released its Modern Wealth Survey. The results suggest a change in all Americans but particularly the younger generations’ money influences. Below are key points from the survey.
- Americans’ financial decisions are being influenced by social media. 57% report paying more attention to how their friends spend than save. 60% wonder how their friends can afford expensive experiences they see posted on social media.
- Of the listed money management influences, social media was ranked by far the worst money management influence. Family members and friends were considered the best influences.
- The pressure to spend as a result of social media is strongest with Gen Z and the Millennials. They reported being the most likely to spend as a result of something they saw on social media. Their likelihood to spend due to social media was approximately double that of Gen X and Boomers.
- Despite most Americans considering themselves savers, 59% live paycheck-to-paycheck.
- On the bright side, 63% of those with a formal financial plan feel financially stable while approximately 50% of those without financial plans are concerned they don’t have enough money to retire.
- Americans with financial plans were more than twice as likely to exhibit discipline when it comes to their finances (e.g., pay bills and save each month, have an emergency fund, … etc.).
- Wealth is increasingly being defined as the “way they live their life” rather than a specific dollar amount.
A key takeaway is social media and its “fear of missing out” phenomena is increasing the pressure on all Americans to spend. The pressure is felt the strongest among the younger generations. When we spend beyond our means, it impacts your long-term financial stability.
The other key takeaway is saving and investing habits of those with written financial plans are dramatically better than those without a plan.