Humans are social creatures, and money habits are no exception. From designer brands to expensive dinners, we often spend to fit in or signal status—even when it strains our budget. This “keeping up” mentality, driven by comparison, is called lifestyle inflation. Social media amplifies it by showcasing curated highlight reels of vacations, gadgets, and luxury purchases.
Research shows that people are more likely to overspend when they believe others are watching. The “spotlight effect” makes us overestimate how much people notice—and judge—our choices. In reality, most aren’t paying attention, but the fear of falling behind can lead to unnecessary debt.
Peer pressure isn’t always external. Internalized expectations, like “I deserve this” or “I work hard, so I should spend,” can justify splurges. To break the cycle, define your financial goals—not someone else’s. Unfollow accounts that trigger envy, and practice saying no without guilt.
Try a “social spending audit”: Track purchases influenced by others for one month. You might be surprised how much goes toward maintaining an image rather than actual happiness. True confidence comes from aligning spending with your values, not others’ approval.