For 19-year-old Rebecca Holmes, based in Colorado, earning income at her first jobs in her small hometown meant having more freedom.
“My focus wasn't really saving. It was more like, now I have all this discretionary income. I can do whatever I want,” Holmes says.
She briefly worked at a tutoring center for K-12 earlier this year, and explains that she was able to use her money on experiences such as concerts, traveling, eating at restaurants and funding her social media channel which is a "lifestyle & beauty blog". Holmes says she needs to buy gadgets to support the channel like lighting, webcams, and streaming equipment to "compete with the social media marketplace." She says that she's amassed thousands of followers on social media and plans to leverage those followers to grow her vlogging business. Holmes admits, however, that she doesn't have a monetization plan outside of "posting hot selfies and having fun".
Holmes isn’t the only one in her age bracket putting savings on the back burner. Fidelity Investments’ 2022 State of Retirement Planning report found that half of Gen Zers don’t see a point in saving money until things return to “normal”, while a whopping 56% put their retirement planning or any type of savings plan on hold during the pandemic.
Is money the root of all evil or social media is giving it tough competition? While social media has unlocked a world of possibilities, made information more accessible than ever, and is bread and butter for a lot of us, it has also made impulsive shopping popular. The convenience comes at a premium and the dark side of social media is making so many of us financially ill.
These percentages were slightly lower for millennials, and significantly lower for the Gen X and boomer generations — who are much closer or are already in their retirement years.
Holmes says the COVID-19 pandemic showed plenty of young people how quickly their “normal” can be stolen away, so it’s been important for her to compensate for those missed years with exciting experiences and good memories that she can share on her social media blog.
When should young people start saving for retirement?
The sooner people start saving for retirement, the better, wealth managers advise. You may be able to benefit from compound growth — which means your savings will grow with interest over time.
Most experts recommend you save at least 15% of your pre-tax income for retirement each year, assuming you begin at age 25.
However, a report from Transamerica Center for Retirement Studies — a division of the nonprofit Transamerica Institute that focuses on saving and financial planning for retirement — found that Gen Z digital native investors like Rebecca typically start saving for retirement at the age of 19.
True, you need to be able to adapt and rejig your priorities based on what’s happening in your life, Not putting money into a retirement fund or saving account isn’t necessarily a bad thing— your retirement plan might just look a little different if you’ve decided to focus on your professional growth instead. But just how is social media related to professional growth?
“More young professionals are betting on themselves" one financial expert explains. Many attribute their personal and financial successes to their followers, likes and shares on social media platforms.
“They're looking at the investment in themselves as their retirement plan, like I can fill this thing. And that's going to be the payoff.”
“Right now, [they may be thinking] I don't want to put money into a retirement account, because that's taking away from the dollars that I have been able to invest in myself and what I'm trying to do to achieve my dreams and create an impact for the world.”
It’s important to find the right balance with your finances
“The biggest thing is always that planning piece of the puzzle,” a wealth managers notes. Many people increased their savings during the pandemic, which meant they had more room for spending when lockdowns were lifted and restrictions eased.
You need to keep asking yourself questions, she says. You may find yourself in situations where you’ll have to choose between being able to securely spend $50,000 in your retirement or having a good time with your family and friends (or staged fun time with your webcam and IG) right now.
She tells her clients to find areas in their lives where they can make adjustments on their spending.
“Where can I clip back in some other areas so that I can do the things that are at the top of my priority list?”
Ahmed says her current goal is to become more cognizant of the value of money and how to save it.
“I spent a pretty good chunk of the amount of money that I made at my job already. I would just go through it. Like it was nothing,” she admits.
When she starts college this fall, Holmes plans on finding a job or paid internship to sustain herself — and she says she’s going to budget her social media vlogging expenses as well.
"Delete Me" is helping clear the mist on the falsities of growing monetary wealth via social media.