4 Ways Social Media Makes You Spend More

By Linsey Knerl | November 03, 2010 AAA
4 Ways Social Media Makes You Spend More

The internet has allowed for a sense of community where there wasn't one before. Neighbors, friends, relatives and even strangers can get together and chat, share advice, play games or learn more about each other via today's social media opportunities. But are they also spending more cash? While social media may be free, these popular online commodities may be prompting you to blow your budget in a big way. (For more, see From The Printing Press To The Internet.)

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1. Coupon Groups
This one's more social marketing than social media, but it can really encourage you to spend. One of the hottest new ways to purchase just about anything is with the power of a group, and sites like Groupon, LivingSocial and Eversave have made headlines with their attention-grabbing offers of up to 90% off on shopping, restaurant and specialty merchandise purchases. While they are a great opportunity to buy a gift certificate for a new restaurant you were already going to try, or to stock up on gifts for the upcoming holiday, the temptation to buy things you don't need (or won't use) is high. The alluring price point, often presented in a percentage off the regular price, is made even more attractive by the brief purchasing window.

The moral of this story is clear: Don't let a ticking timer pressure you into $50 in handmade taffy or a luxury eyebrow wax if it wasn't in your budget to begin with - no matter how many other people are buying.

2. Facebook Gifts
The only thing more wasteful than buying goods and services you don't really want is to buy "virtual" gifts and services that you don't really want. In 2009, Facebook made a rumored $10 million in its business of selling virtual tokens via the site's games and applications, proving that users are buying, whether they can afford to or not. It's perfectly fine to partake in the gifting, provided it's within your spending allowance. Just be aware that it may be a hard habit to avoid. Friends and family are usually the first to gift - and often expect to be gifted in return.

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3. Cell Phone Data Packages
As the functions of the basic cell phone have expanded, so has the bill for its particular data plan. Some customers are adept at sticking to the minimum in coverage, getting basic plans for their call minutes and enough text messages to get through a month, but even more demand the tech tools that only an unlimited data plan can provide. This can push the monthly bill for a smart phone with web-browsing, email and instant access to social media accounts easily into the $80-$150 range.

Before investing in the phone that does everything, be aware of the cost for such capabilities. Your home computer might still be the most affordable place to check those Facebook and Twitter accounts. (For more, check out 6 Tips For Getting A Good Cell Phone Plan.)

4. Games
Many social media sites offer users the chance to play games for free, giving those late-night web fanatics something fun to pass the time with. Unfortunately, many of the most popular (and addictive) games are free for a limited time only. After a 24-hour to seven-day trial, for example, the price goes up dramatically to $20 or more for the pricier versions.

In addition to simple arcade-style games that help burn away minutes on your lunch break, RPGs (role playing games) offer free play but may require paid privileges to remain competitive. Vacation time, upgrades from the light version and specialized gaming tools are all examples of ways gamers can spend money for a better outcome, encouraging a "pay to play" model even within a free game. (For a related reading, see Play Video Games; Become A Millionaire.)

The Bottom Line
Finding friends online shouldn't cost much, but it can often cause social media fans to dig deep for an optimized experience. Before getting too involved with any "free" community, take time to learn how your budget can be affected, and adjust your activities accordingly. (For more, check out 6 Ways To Save Online.)

For the latest financial news, see Water Cooler Finance: Rising Markets And Buffett's Successor.

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