FOMO economy: Social media is driving Gen Z into debt

The phrase “keeping up with the Joneses” first appeared in 1850 in The New Yorker, describing how the neighbors of Elizabeth Schermerhorn Jones, a wealthy New York socialite, were so intimidated by her summer home in the Hudson Valley that many were prompted to renovate their own properties to, as the magazine put it, keep up with the Joneses. 

Since then, the idiom has found a home in the competitive arena of middle-class America. For years, “keeping up with the Joneses” has conjured up images of a typically white, straight American family — husband, wife, two kids, a dog — standing on their front lawn, waving to their neighbors, the husband smiling as he clocks the neighbor’s new car and the wife wondering if the neighbors’ kids are dressed better than their own. It’s a nod to the pressure that comes when your home, family and a few key material possessions are treated as vital parts of your public presentation. 

But for those who grew up on smartphones, social media has dramatically expanded what’s expected from their public presentation. Today’s young adults feel pressure to document every element of their life, big and small — breakfast, lunch, dinner, side hustles, weekend plans, vacations, friends, partners — in order to present a digital amalgamation of a fully-formed person, checking off the same material and experiential boxes of people not only on their street or in their neighborhood, but all around the world. 

New research shows that keeping with the digital Joneses, and making purchases based on pressures from social media, is driving a significant portion of young Americans into debt. 

“Minds on Money,” a new survey from Ally Financial of more than 1,000 U.S. adults, found that 40% of Gen Zers regularly take on debt for impulsive purchases of items or experiences they saw on social media. But social media isn’t just driving the purchase — it’s a key part of what comes next, with just as many Gen Zers saying that these purchases are made, in part, to be shared on social media. 

“That blew my mind,” Ally Bank’s Jack Howard told Salon. She’s the bank’s head of money wellness, a new division focused on behavioral financial education and the intersection of psychology and money. Howard spent years developing it at the bank before its 2023 launch. 

“I'm not judging, she said. “I don't want to create shame for anybody. I'm just providing perspective. But what we're seeing is that (Gen Z) may create debt .. with the sole purpose of posting on social media.” 

Just as many Gen Zers who say they buy stuff for social media wind up regretting the purchases, the report found. And while cynicism is tempting, and it’s easy to construct an argument against Gen Z and millennials’ failure to simply buckle down and save, it’s worth considering the pressure felt by those expected to document, especially but not exclusively, the most interesting part of their lives.

Benjamin Fields, a 27-year-old Ph.D. candidate who splits his time between Berkley, California and Tulsa, Oklahoma, said he feels this pressure "particularly strongly.” His Ph.D. program is paid for by a mix of grants and teaching requirements. Fields worked full-time as a high school teacher for the first two years of the program, but he’s not working right now; he’ll soon complete his program’s field work overseas.

“I see everyone on social media working a job, traveling, and getting new cars (or) houses,” Fields said in a message.  “It really makes me spend recklessly sometimes to try to keep up, and feel like I am not wasting my life in school without a salary.” 

Juliette Haas, a 23-year-old wellness influencer living in New York and working in public relations, told me that, given her profession, “you'd think I'd be immune to social media manipulation.” Instead, she said, “I'm with the rest of my generation, adding peptide masks to my cart at midnight.”

In her PR role, Haas helps develop the messaging that companies employ to drive consumer spending. “And yet, I still fall victim to the TikTok ads that are probably targeting data I helped some other brand collect,” she said. “It's like being a poker dealer who keeps losing money at the same table. I know the algorithm is feeding me content designed to make me feel like something’s missing, but apparently knowing how the sausage is made doesn't stop you from eating it.”

If social media is a young American’s new house-with-a-picket-fence, then it’s hard to overstate just how much more expansive a person’s public presentation is expected to be. Because anything can be documented, young people are pressured to document an ideal version of, literally, every aspect of their life — their occupation, relationship status and social lives, of course, but also, how frequently are they getting brunch? Taking a workout class? Wandering into a bookstore? And surely they’re going to Coachella, right? 

“We're the first generation raised in a FOMO economy,” Haas added.  

On social media, these digital picket fences are hardly fixed, always evolving, and define in explicitly clear terms how young consumers feel they should be living. In terms of big-ticket pop cultural purchases, last summer’s white picket fence might’ve been a ticket to Charli XCX’s "Brat" tour; this year, it appears to be Beyoncé’s "Cowboy Carter" show. Depending on your audience (you might call this “community”), the digital version of a perfectly mowed lawn might be a staple wardrobe item, like Coach’s oversized “it” bag, or the best knockoff version you can find. Or at least one European vacation in the next year, because everybody you know is posting idyllic carousels of their week in Santorini. 

But this pressure isn’t just pushing young people to participate in as many big, expensive cultural events as possible. Rather, on any given night, you might agree to grab a drink with an acquaintance, because it’s better than doing nothing, and your phone is full of evidence that, right now, so many people are doing something. That drink yields a photo of your hand next to your cocktail, the photo goes into that month’s carousel and voila — you’re living a full, engaged life. Whether you’re experiencing it is a different question. 

What surprised Howard the most, she said, wasn’t that younger consumers are taking on significant debt or that they’re spending money on nonessential purchases like clothing or dining out. It’s the fact that so many young people are going into debt for concert tickets or photogenic vacations that, if they’re focused on documenting on social media, won’t offer the same mental health boost as they would unplugged.

“Experiences, and spending money on experiences, increases your well-being. We're missing out on that,” Howard said. “We're buying this stuff, and then we're missing out on the ability to actually be present. And it's creating so much anxiety with our younger generation.”