FOMO, or more commonly known as the ‘Fear of Missing Out’ – is that anxiety and potential disappointment on missing out on an exciting event that you’ve seen or all your friends are attending.
We get it. We’ve all been there. Especially in the early teen years when we didn’t have any income and relied on others for our pocket money and we had to ask permission before leaving the house.
Nowadays, FOMO is easy to avoid – we don’t need permission and it’s so easy to just stick the expenses on our credit cards, dip into our savings or go skint for a week before payday. However, this can lead to some serious financial issues which can be disastrous for your credit score.
How has FOMO Become an Issue?
Nowadays we live our entire lives on social media, which has become the catalyst for causing an entire generation to feel the effects of FOMO. Our relatively new, interconnected world means we’re tuned in to things that we previously wouldn’t have even known about.
Say you’re sat in your dressing gown eating beans on toast in bed but your friend has just posted an Instagram picture at a fancy restaurant that you’ve been dying to try, it’s easier to focus on how much “fun” your friend is having – regardless of how much they’ve spent – rather than being content with what you’ve got going on.
How can FOMO Affect our Finances?
Unfortunately for most of us, money management skills aren’t ingrained into us from a young age which can mean many of us end up in debt after unmissable credit alternatives are offered to us from the age of 18. A poll by money.co.uk revealed that at the start of 2020, over half of UK adults had personal debt of up to £100,000.
Often, people can wrongly believe that if they don’t act on this one thing immediately, then the chance will be lost forever – however, fear is not a reason to act upon something just because a few others are doing so.
The need to feel involved and not miss out, paired with our lack of financial education and alluring credit opportunities, can quickly lead to a downward spiral of debt, which is notoriously tricky to get out of.
- If you’re looking to get out of debt but don’t have tonnes of cash lying around, check out our helpful 8 step guide on dealing with debt on a tight budget
Additionally, if you use credit to purchase FOMO related products and services this can impact your credit score. Your credit utilisation is an important factor which accounts for 10% of your total score. You should be using less than 25% of your total credit limit to keep your score optimised, which is easy to go over if you don’t keep an eye on it.
How to Prevent FOMO from Ruining Your Credit Score?
The trick is to not let the fear take control of your life. Sadly it’s unlikely we will ever be able to eradicate FOMO from our lives for good, but there are a few ways to prevent it from ruining your finances and impacting your credit score:
Evaluate Before You Make a Purchase
This is probably the most important thing to remember when it comes to purchasing anything, as it will help to prevent you from making any hasty decisions.
Of course, that new pair of designer trainers which all your friends are buying may make you happy for a while but soon they’ll be old news and you’ll be £200 down that you could have used to pay off some other expenses or add to your savings.
If you’re in need of a new pair of trainers, that’s a different story – but there are still a few things to ask yourself before you make a purchase:
- Are these shoes good quality and will last?
- Are they suitable for all seasons?
- How long will I wear them for?
- Do I feel comfortable in them?
- Could I scale back on any other non-essential expenses this month?
Adapt Your Mindset
It’s easy to get bogged down under your Instagram or Facebook newsfeed – with all your friends, or even strangers, heading off on extravagant holidays, attending glamorous events or purchasing the latest tech.
If you feel like it will help, take a break from your social media, or set yourself a cut-off point when you put your phone down for the day. This will help to limit any FOMO triggers you may come across.
Remember it’s okay to feel okay, you don’t need to always ride the wave of adrenaline-inducing escapades which often come with a hefty price tag. The enjoyment of the simple things in life will create sustainable happiness long-term and not until the next event invite pops up on your Facebook page.
Plan Exciting Things Ahead of Time
FOMO is likely to catch you when you’re already feeling a little bored scrolling through your newsfeed, usually on a Friday afternoon or when you don’t have work the next day.
A spontaneous plan at the end of the working week it great from time to time but spending the money that you’d set aside for your phone bill will only create more problems down the line.
However, if you make concise plans in advance, you’ll know exactly how much you need to budget each week so you will know exactly where you stand and give you something to look forward to.
Could a Prepaid Card Help to Eliminate Unnecessary Spending?
If you’ve been known to dip into your overdraft to pay for luxuries or live off your credit card a not long after payday, then a prepaid debit card may be one solution to cut down on your spending.
A prepaid card doesn’t come with a credit facility or overdraft feature and you can only spend the money you load onto it, such as your wages. However, at Suits Me®, our prepaid cards do come with a lot more than you may think.
We offer a current account with a mobile banking app and online banking and a Mastercard prepaid card which works exactly like a standard debit card.
You can send and receive money, set up direct debits and standing orders to ensure you don’t miss a regular payment and best of all, we offer an exclusive cashback reward programme where you’ll automatically get a percentage back on what you’ve spent when you use your Suits Me® card with one of our retail partners.