The Fear of Missing Out or FOMO defines a mindset where you are afraid to miss out on experiences or advantages that other people have. It starts when you begin comparing your life with others and see them enjoying newer, better things than you are. It could be social media FOMO, vacation FOMO or career FOMO. Those who compare themselves with others may believe that this is the best way to improve their lives, but in the end, they are only giving in to more FOMO.
Those who believe that they are missing out on saving opportunities or lucrative spending opportunities suffer from what is known as Financial FOMO. It is a kind of financial anxiety that plagues many members of the salaried community today. We have put together five simple things you must do today to evaluate if you are missing out and put your fears to rest. Here they are –
- Set Financial Goals – When you don’t have an objective approach to your finances, you end up making multiple unplanned purchases and spending randomly. Before you know it, you have zero savings, and you are living pay-check to pay-check. Set realistic financial goals to save or invest at the end of each month and work towards achieving them. It will encourage you to keep an eye on your finances and curb random expenses. We recommend creating an emergency fund with at least 3 to 6 months worth of living expenses to minimize your reliance on credit cards.
- Take on Unnecessary Debt – If your friend just landed a huge bonus and decided to spend it on a lavish vacation, it doesn’t mean you have to do it too. Especially if it means taking on debt. Many financial institutions offer short-term loans very quickly but at high rates of interest. These loans often come bundled with attractive offerings and are designed to land you into a debt trap. Avoid fixating on what others can afford and spend only as much as you need to.
- Financial Achievements of Those Around You – Don’t be disheartened to see others ahead of you when you are just starting to pursue your financial goals. Everyone starts somewhere, and the best strategy is to focus on your finances without watching how well (or poorly) others are doing. Focusing on others prevents you from acknowledging your own achievements and celebrating them. Instead, you will find yourself belittling your accomplishments and experience FOMO.
- Avoid Unwanted Expenditure – When we compare ourselves with our peers, it urges us to spend on things we don’t need. Unwanted expenses eat into your savings and distance you from your financial goals. It can also lead to personal problems among your family and friends.
- Leads to Poor Investment Choices – Devote careful deliberation to make sound investment choices. Consider liquidity, risk appetite, and time, and not schemes offering bumper returns in short periods. Sometimes, in the stress of catching up with your peers, you tend to invest without properly examining a scheme or get lured into Ponzi schemes. It can lead to massive losses in the long run.
FOMO is a headspace that can happen to anyone. To protect yourself from financial FOMO, continually evaluate your choices objectively and never lose sight of your financial goals. The sooner you learn to recognize financial FOMO – the easier it will be to avoid falling prey to it. In our interconnected world of social media, we are all bound to compare ourselves with others now and then. But peer pressure should never be a basis for planning your finances or incurring significant expenses. It is important to find gratitude for what we have and gain a more profound clarity in the financial choices we make.
I am Arjun Kumar. I am the owner and administrator of Finance Gradeup. I have completed my education in Arts & Technology. Arjun Kumar usually has interests in playing games, reading and writing. He was a brilliant student during his college days. He also works for many private companies, but the main interest of Arjun Kumar is digital marketing. He thinks that reading is a must before providing any quality information to his readers. You can find Arjun Kumar on much social media handles online, or you can learn more about him in about us page.