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FOMO spending stands for “fear of missing out,” meaning you are dropping dollars to keep up with what others are doing. That might mean anything from trying the skincare product a favorite celeb swears by to dining at the super-pricey new omakase place all your friends are raving about or even signing your toddler up for an enrichment class because your neighbor says it’s a fab headstart.

The fear of missing out can change how many people relate to their cash. It can trigger impulsive and compulsive spending and lead to “splashing out” on things they never had any intention of purchasing. In other words, it can motivate them to live (too) large and wind up with pricey credit card debt and little progress towards their savings goals.

If you’re wondering how to stop FOMO spending, know this: It doesn’t mean subsisting on ramen and never traveling. It does mean being mindful and meaningful so you don’t get caught up in trying to match what your free-spending friends may do. Here, you’ll learn more about FOMO spending and how not to overdo it.

Wait, Back Up—What Is FOMO?

FOMO, or Fear Of Missing Out, is a feeling of anxiety someone might experience about not being part of an event that is happening, usually triggered these days by seeing social media posts from friends enjoying an activity (from a Taylor Swift concert to a holiday in Croatia) and wishing you were part of the fun. While it’s certainly true that businesses employ FOMO tactics to get you to buy things, it’s not just a sales strategy.

Nick Hobson Ph.D., says “While the fear of missing out has always been there, the explosion of social media has launched our young people headfirst into the FOMO experience.”

For many people, social media can be their main community lifeline, and having the impression that you are not part of the “in” group is enough to trigger a stress response like FOMO.

FOMO Spending Definition

So how is FOMO spending defined? It’s when a fear of missing out propels you to spend money (perhaps too much money) to feel as if you are part of the crowd and keeping up with your peers.

Examples could be feeling as if two far-flung vacations a year are must-haves because that’s what your coworkers do. Or perhaps it means plunking down four figures on a designer bag because all your friends have one. At a smaller scale, it could mean joining the other moms every morning after drop-off for a fancy latte. It’s all part of feeling as if you’re on the same level as your peers…and it all can add up.

FOMO Spending to Keep Up with Peers

How widespread is FOMO spending? One recent study found that almost 40% of more than 1,000 Americans ages 18 to 34 said they have gone into debt just to keep up with their friends’ lifestyles. This is FOMO taken the financial extreme.

People may try to overcome FOMO by spending more than they have on things like travel, clothes, food, and going out. Whether it’s bigger “once-in-a-lifetime” experiences you can’t miss out on like trips, music festivals, or weddings, or even smaller events like dinner and drinks, FOMO spending can impact your finances and ability to build wealth over time.

•  FOMO spending often stems from peer pressure to buy something you can’t afford so that you can still participate in a group.

•  It could stem from feelings of insecurity; you want to show others that you fit in and do so by spending more than you might otherwise.

Unfortunately, this can add up to extra spending, money stress, and debt.

How Many People FOMO Spend?

As noted above, one recent study found that 40% of people admit to FOMO spending. And those are the ones willing to admit to it. The figure could be considerably higher.

One study found almost twice that percentage of people admitted to going into debt to keep up with their friends’ spending. That’s a startling figure and shows just how common FOMO spending can be.

4 Tips to Avoid FOMO Spending

Reining in FOMO spending can be hard, especially if your friends are truly living at a different income level than you. But odds are, some of your friend group might be in the same situation and are overspending in an effort to impress. You can avoid FOMO shopping or at least cut back on spending by trying these tips:

1. Suggest Free Alternatives

The first way to conquer FOMO spending is to simply stop spending! While it’s of course easier said than done, why not come up with a free alternative when a friend suggests plans?

Meeting for up for a $10 bubble tea at a cafe could just as easily turn into sitting on your couch with a homemade cup of joe. Friends want to go out to the movies or the mall? Suggest visiting a museum on a day they offer free admission instead.

2. Limit Your Card Usage and Carry Cash

Limiting your spending on credit or even debit cards and making the majority of your purchases with cash will drastically impact how often you impulse-spend on something when the feeling of FOMO creeps in.

If you only withdraw a certain amount before heading out to dinner or the bar, you’ll already have a pre-set budget that you know you feel comfortable spending. So maybe you only have one pricey cocktail or skip coffee and dessert: You can still have a great experience going out.

3. Create a Budget and Stick to It

Along the same lines, creating a monthly or even weekly budget may also help you cut down on FOMO spending. Your budget can and should include money for savings or big-ticket items like travel you know you have coming up. Having a budget can give you guardrails and help you focus on the big-picture rather than getting caught up in the FOMO moment.

By putting some money towards future goals and then calculating how much “fun” money you have left over after bills, you’ll know exactly when you’ve reached your limit. While making a budget might not help you eliminate FOMO spending altogether, you’ll at least give yourself more constraints if you limit yourself to a specific spending amount.

4. Lower Your Social Media Exposure

Ready for another way to stop spending so much? The endless scrolling on platforms like Facebook, TikTok, and Instagram offer some instant gratification, but social media is one of the main contributing factors of FOMO.

Targeted ads, influencers touting products, and even your own friends’ posts can all conspire to budget you toward spending too much. Seeing all the wonderful shiny things and exciting experiences out there can lead you to splurge (and often).

Many people find their guard is especially down at night, and that’s when they are likely to snap up skincare products, a new watch, or a hotel room overlooking the beach. If you can relate, trade in your laptop or phone time before bed for a good old-fashioned book or movie. You won’t wake up the next morning with that guilt about spending money.

If You Must Spend, Still Plan Ahead

You won’t be able to avoid FOMO spending all of the time, so it’s also important to have a strategy in place for making the best use of your time and money if the feeling kicks in.

Some people consider their fixed vs. variable expenses and build in a little extra spending money as part of their discretionary spending. If you know you have, say, a cash cushion of $100 or $200 a month, this can help with those moments when you decide you want to “keep up with the Joneses.” You can decide if this is the moment to splurge or not.

Delayed Gratification

If you have a sudden urge to buy something because of FOMO, try instead to write the item down, whether in a Notes app on your phone or even just a physical piece of paper, and come back to it 24 hours later.

This will help you avoid impulse purchases just because something is on sale, for instance, or your friend just bought it. You can evaluate in a day if it’s something you still really need. Some people even stretch that 24 hours out to a full month with what’s known as the 30-day spending rule.

Buying in Person

Nothing crushes the FOMO spending feeling more than forcing yourself to trek to an actual physical store to make a purchase.

Too many times, FOMO spending happens when you are online shopping and the ease of delivery right to your door doesn’t make you think twice about your purchase.

Making that easy impulse purchase into a chore can be a buzzkill that helps you save big-time.

Introducing SoFi Checking and Savings

Managing your money well can mean recognizing FOMO spending and seeing when it may fit with your budget and your money goals. It can take wisdom and discipline, but it can keep you out of debt and help you build wealth.

This is where the right banking partner comes in; one who can help you see the big picture on your spending and keep tabs on your cash flow. Like SoFi.

Interested in opening an online bank account? When you sign up for a SoFi Checking and Savings account with direct deposit, you’ll get a competitive annual percentage yield (APY), pay zero account fees, and enjoy an array of rewards, such as access to the Allpoint Network of 55,000+ fee-free ATMs globally. Qualifying accounts can even access their paycheck up to two days early.

FAQ

How do you deal with FOMO buying?

Recognizing FOMO buying is the first step to minimizing it. You might avoid social media apps that trigger this kind of spending; find free alternatives to pricey outings your friends suggest; or tweak your budget to allow for small splurges and stick within those spending limits.

How can you stop being affected by FOMO?

Avoiding FOMO is a very personal thing. Some people avoid or even delete social media apps that trigger overspending; others have honest talks with their friend group about their financial limits; still others decide to sidestep certain outings with friends that they know will bust their budget and join them for low-cost get-togethers instead.

What is FOMO spending?

FOMO spending is when you buy an item or experience because you don’t want to miss out on something “everyone else is doing.” Some people may think of it as responding to peer pressure. You purchase, say, a status watch or take a pricey vacation not because you can comfortably afford it but because you want to “keep up with the Joneses.”

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