Take the “Do You Have Financial FOMO” Quiz
FOMO (short for "fear of missing out") is practically unavoidable in today's hyperconnected world-but it doesn't just apply to social events. It can quietly shape the way we spend and save, too. Maybe you're pining over a friend's Italian vacation photos while you're working overtime to pay off bills. Or, maybe you're coveting a coworker's new car while you're still driving a 15-year-old clunker. That gnawing feeling of "Should I be doing more?" is financial FOMO in action. It feeds the idea that your worth is tied to what you can afford to show.
What Causes Financial FOMO
Financial FOMO is tied to something psychologists call social comparison—our instinct to measure ourselves against others. That impulse has been around forever, but it wasn’t named until 1954, when psychologist Leon Festinger introduced Social Comparison Theory.
Festinger's research was shaped by post-WWII America, an era marked by booming consumerism and a growing obsession with status and conformity. People were encouraged to find their place in society and compare it to everyone else's.
Today, that same instinct is supercharged by the digital world. Social media serves up an endless stream of curated wins: vacations, new cars, home upgrades. What we don't see is the debt, burnout, or compromises behind the scenes.
In this environment, the pressure to "keep up" doesn't just come from within-it's baked into our culture. And when you compare your everyday life to someone else's highlight reel, it's easy to feel like everyone else is living their best life, and you're somehow late to the party. That's when financial FOMO creeps in.
Signs You Might Be Caught in a Financial FOMO Trap
Financial FOMO doesn't always feel obvious. It can sneak in through everyday decisions and slowly pull you off track. Here are a few red flags that your spending might be driven by comparison, not intention:
1. Lifestyle Creep
As your income grows, it's tempting to upgrade everything from your wardrobe to your home theater system-or even your home. But if your spending grows as fast as your paycheck, you won't build wealth. You'll just be treading water in nicer shoes.
2. Credit Card Dependence
Trying to keep up with the Joneses can lead to impulse purchases, overspending, and mountainous credit card debt. Sure, it starts with a desire to look more financially secure, but it ends with you becoming less financially stable.
3. Disconnection from Your Own Goals
Left unchecked, financial FOMO can nudge you toward choices that don’t match your goals, just your insecurities. After all, when your money is being spent chasing someone else’s version of success, your own priorities—like saving for a home, traveling, starting a business, or retiring early—get sidelined.
4. Emotional Spending
We shop when we’re stressed. Or bored. Or when someone else posts their sweet new Oura ring, and we suddenly feel like we need one too. But when spending becomes a coping mechanism or a way to boost your mood, it’s worth asking what you’re really trying to soothe.
5. Shame Around Budgeting
If you’re avoiding setting a budget because it feels restrictive, it might be time to rethink your money mindset. Budgeting isn’t a punishment. It’s a tool to help you stay focused on what matters to you (not what everyone else is doing).
6. Statement Avoidance
If looking at your statements makes you feel like you're failing, it's not just about numbers, it's about how you're feeling-and that matters. Show yourself some financial compassion, but don't shy away from the facts. The old adage, "knowledge is power," is especially true when it comes to finances.
7. Justifying Unplanned Purchases
If you catch yourself saying, "I deserve it," "It was on sale," or "YOLO" more often than you'd like, take note. A little indulgence is fine, but when rationalizing becomes a habit (or the norm), it might be masking a deeper pressure to spend for the sake of keeping up.
How to Escape the Financial FOMO Trap
You don't have to become a minimalist or boycott spending to avoid the financial FOMO trap. Just make sure your money reflects what you value. To do that, start by defining your version of "enough." What makes you feel secure, joyful, or fulfilled? Maybe it's a modest home, debt-free living, or the freedom to work fewer hours. Once you know your "enough," it's easier to tune out the noise.
Next, build a budget that supports your values-not someone else's expectations. Even if you're paying off debt, your budget shouldn't feel like punishment. It's a tool for making space for what matters most.
To stay grounded, try these habits:
- Unfollow the triggers. If certain social media accounts leave you feeling "less than," mute or unfollow them.
- Curate your feed. Choose accounts that inspire you, not ones that quietly pressure you to spend.
- Check in with yourself. Practice gratitude and pay attention to what actually makes you feel good.
- Gut-check your wants. When FOMO flares up, pause and ask yourself: "Do I really want that or do I want what I think it says about me?" A quick reality check can prevent regret spending.
- Don't let FOMO thrive in silence. If you're feeling the pressure, talk about it. Open up to a trusted friend or partner. You might be surprised how many people feel the same way behind closed doors.
Above all, remember that financial peace comes from knowing what you need and letting the rest go. After all, we humans are probably never going to stop comparing ourselves to our peers, but we can change how we respond.
Want more financial wellness tips?
- Check out our post on the psychological impact of debt.
- Learn how to talk about money stress.
- Find out how to protect your finances through mindfulness.