Don't let Instagram envy put you in debt

The fear of missing out can cause social media-influenced spending on holidays

With so many documenting their lives on Instagram, it can encourage followers to rack up on debt on holidays or things they cannot afford. Reuters

When was the last time scrolling through Instagram made you feel better?

While the puppy photos on your feed momentarily boost your mood, the parade of carefully selected and artfully edited experiences can leave many feeling depleted. How can these people afford to travel to New Zealand? When will it be your turn to take a dream trip to Bali and post endless selfies from the beach? Or will it ever be possible to afford a stay in one of the 5-star hotels that litter the beaches of the UAE?

You know by now that social media leaves out the fender benders, arguments and weather mishaps essential to any holiday. You can add financial faux pas to that list.

While you can never really know how much money your friends or the people you follow on social media have - it's safe to say that at least some of them may not be able to afford the trips that make you feel inferior without going into credit card debt.

There are 6.5 million credit facilities such as loans, credit cards, mortgages and overdrafts in the UAE, Marwan Lutfi, the chief executive of Al Etihad Credit Bureau told The National in November, with roughly 3 million active borrowers in the country.

A recent poll of UAE residents by UAE financial comparison site yallacompare found, 22 per cent of the 1200 polled had more credit card debt in the last quarter of 2018 compared to the same period last year. However, on a positive note, almost half (48 per cent) had less to pay off.

In the US, the story is far worse.  A full 48 per cent of US households have credit card debt, according to a recent NerdWallet analysis. The average household with debt carries $6,929 in balances from month to month, which means paying about $1,141 in interest per year - a situation you want to avoid at all costs.

Here's how to keep Instagram from bullying you into overspending and racking up unnecessary debt on your credit card.

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Don't use social media to disguise your financial black hole

Dirham Stretcher - the UAE Facebook group that helps your money go further

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Find the source of the Fomo

If a friend's holiday photo really got under your skin, explore why. The destination or trip itself may not be the source of that FOMO, or fear of missing out. Has it been a while since you've taken time off work, and you're resentful of how relaxed this person seems? Are you jealous of how close they appear to the people they are on the trip with?

There could be ways to ease your anxiety for free, without going on holiday at all. Consider scheduling a mental health day and going to a local museum on a day with free or reduced-price admission to get your mind off work. Round up friends interested in starting a book club or hiking group that meets monthly so you can feel part of a community.

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Go on holiday on the cheap

If travelling is what you crave, plan a debt-free trip by estimating how much you'll spend on transportation, lodging, meals and activities and saving that amount in advance. Create a savings account for specific purposes, such as a holiday savings account, so setting aside money each month for travel means you save passively over time.

But if you haven't been saving and need a getaway stat, stay flexible on dates and locations and use price-tracking apps to find hotel and flight deals. Consider staying local and taking a short road trip to an attraction in your area you've never been to. Split an Airbnb in a country nearby with a group of friends and spend a weekend doing activities that don't involve screens, like playing cards, exploring nature and making art.

Credit cards aren't always the enemy; with a good credit score and a commitment to paying off your balance each month, you can get a rewards card that lets you earn points or cash back that will subsidise future trips. There are a number of air miles credit cards in the UAE, for example, that let you build up your miles through your everyday credit card spend. These can then be used for hotel stays or reduced flight costs - or even upgrades to business class.

Be realistic about your ability to spend responsibly and avoid carrying a balance, though. The interest you could end up paying, and the anxiety that comes with ballooning credit card debt, can quickly erode any post-vacation glow.

The average annual interest rate on credit cards in the UAE is close to 40 per cent, says Ambareen Musa, the founder and chief executive of Souqalmal.com, which is why consumers should always avoid the slippery slope of credit card debt.

And  with global interest rates now on the rise, carrying a balance is only going to get more expensive. In the US for example, Nick Clements, co-founder of MagnifyMoney.com, a financial information website, estimates that the 122 million Americans that carry credit card debt month to month will pay over $150 in extra interest per year compared with before the Fed's interest rate increases began.

Ultimately, if you have a high outstanding balance, don't load up your debt any more by paying for things you cannot afford. Instead pay it down as soon as you can to avoid giving more money to the bank in interest.

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Cut back on scrolling

There's another, potentially nuclear-sounding option to prevent social media-influenced spending: don't look at Instagram at all.

You don't have to go cold turkey. You can continue to post your own photos or communicate with friends via direct message, but rein in mindlessly perusing other people's feeds. Start by setting a goal to wait until noon to open the app, or choosing two specific times of day to check it. Like any behaviour you're trying to change, it will be hard at first, but you'll likely be surprised by how little you miss the app. Fill the time you get back with activities you enjoy.

Use the time you do not spend mindlessly scrolling through your phone to crank up your savings instead. According to yallacompare's latest financial confidence study, while 17 per cent of residents are saving more than they did 12 months ago, almost half (47 per cent) save less than Dh999 a month.

The ideal outcome? Making plans and choosing travel or life experiences based on what makes you happy, not on a highly filtered version of someone else's life. Also by saving a larger proportion of your monthly income, you can ensure you have enough stashed away for your next overseas trip without having to use a credit card to fund it.