Do you suffer from FOMO – the fear of missing out? If so, it could be costing you a sizeable chunk of cash, because research has revealed that people typically spend an extra £171 per month because they don't want to miss out on all the fun.
According to research from VoucherCodes.co.uk, 20% of those surveyed are likely to blow their budget because they're scared of missing out on something. This is far higher than the 13% who feel the pressure to spend more when they're around people who earn more than they do, the 10% who spend to hide money troubles, and the 7% who admit they splash out in order to 'keep up with the Joneses'.
However, the fear means that people will often spend money on an un-missable night out or a weekend away when they haven't got the funds available. In fact, whatever the reason, 58% of respondents feel under pressure to spend more than they can afford, and that could have long-term financial consequences.
In order to fund this kind of competitive and unnecessary spending, respondents were typically more likely to get themselves in debt than re-organise their budgets. Putting things on the credit card (29%) was the favoured solution, followed by using an overdraft (24%), both of which beat cutting back on luxuries such as nights out (23%). In fact, 21% admitted that they would rather cut back on essentials than miss out, which shows how pressured many people feel.
Unfortunately, this kind of spending could do more harm than good, particularly if everything ends up on an interest-charging credit card. Ideally, it'll be better to feel the fear and miss out anyway, as that way you needn't worry about the long-term effects of exceeding your budget.
But, if you really can't bear to miss out, it's important to do it the right way. Take a close look at your budget and see if anything can be re-jigged, and if so, put those savings into a dedicated account to be withdrawn when fear strikes. An easy access account would be ideal for this purpose, but just make sure to check the withdrawal restrictions so you're not caught out by an unexpected penalty.
Alternatively, if you're caught off-guard and don't have the available funds, it may be an idea to have a 0% credit card as a backup. Having a card that doesn't charge interest on purchases will mean you're able to spread the cost of your un-missable events over the course of several months (or even years) without interest adding to the bill, which could make things slightly more manageable.
But, really, it's always best to budget carefully beforehand so you can afford those little luxuries when the time comes, as there'd be nothing worse than feeling the fear of mounting debt as a result of not wanting to miss out.
Anita Naik, consumer editor at VoucherCodes.co.uk, comments: "It's clear that the fear of missing out is having a marked impact on how British people spend their disposable income. In times gone by, 'Keeping up with the Joneses' was perceived as vital to people wanting to be on a socio-economic and cultural par with their friends and neighbours, but in today's society the apprehension that you might be missing out on all the fun takes precedence, particularly as social platforms show us all the exciting activities our friends are getting up to.
"While everyone feels pressure to spend outside of their means from time to time, you can limit the impact this has on your finances by budgeting carefully, working out where you can sensibly cut back and keeping your eyes peeled for savings and offers on day-to-day items but also on those little luxuries."
Disclaimer: Information is correct as of the date of publication (shown at the top of this article). Any products featured may be withdrawn by their provider or changed at any time.
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