No online concept progresses at a faster pace than social media, as it continues to make its mark in the fields of business, non-profits and social collaborations. With the recent revelation that up to 20% of U.S. consumers now also use social media giant Facebook to research products prior to purchasing them, social media is emerging as a significant player in the e-commerce market sector. Given this and the fact that social media has already delivered many money-saving techniques for brands, just how effective can it be in helping consumers save their hard-earned cash?

TUTORIAL: Budgeting Basics

Social Conversations
More than 1.5 million local businesses, around the globe, now boast Facebook pages - with 3 million pages in total representing brands and businesses of all shapes and sizes. With an average of 20 million individual consumers becoming fans of these pages every day, there is a clear sense of group wisdom developing between customers. This is where social media plays a key role in producing customer referrals and information, which can either secure discounts through promotions, or help individual shoppers save money, thanks to the advice of a friend.

This concept has already been applied to niche social media resources like and, which rely on a network of like-minded car enthusiasts to share information. CarGurus has a network of 600,000 users who post reviews, opinions and discount information concerning a range of cars and models. These snippets of social information are shared through conversations that allow consumers to find the best car and deal to suit their requirements. (For related reading, see How Small Businesses Can Best Use Social Media.)

Building Credit Scores
The global recession, and a stalled economic recovery, has left a long line of consumers adversely affected, financially. This can often be attributed to reduced disposable income, or, more significantly, a bad credit rating. By the close of 2010, the level of consumer debt in the U.S. stood at just under $2,400 billion, which averages out to approximately $7,800 per individual, in the country. So, certain organizations have used social media to target those afflicted, in order to teach them the processes of building and rebuilding a positive credit score. (For more information on credit scores, check out The Importance of Your Credit Rating.) is one such website that can help consumers improve their credit scores. Using Twitter and similar social media outlets, the website offers information and tools which teach consumers how they can save money while financing expensive activities, such as purchasing a car or home. The site uses real details and information to achieve this, allowing consumers to lower their loan rates and reduce the amount of money that they pay in monthly installments.

Tapping into a Global Community
The purpose behind any social media site is to draw individuals, businesses and consumers into a close-knit and easily-accessible global community. This is also where the idea of crowd sourcing emerged from, as businesses could suddenly tap into local knowledge, and talent, to help drive their brands forward. Evolving this concept, a stage further, are niche social media outlets. and, which are community based resources, focus on the principles of sharing and receiving from like-minded individuals.

BookMooch is of particular interest to some consumers, as it connects an entire community of book lovers and avid readers, who can share and receive online books that they own or are interested in reading. So, rather than having to download a book, or purchase it new, from a traditional book store, consumers can access their book of choice for free for an agreed upon period of time. The same principle is applied on a more diverse scale by Freecycle, which has a network of thousands of people who are looking to share and exchange consumer items within their local areas. (For related reading on utilizing the second-hand market, see Go Green, Save Money.)

The Bottom Line

Social media is a broad concept, and one which is driven by the needs of its users and followers. In an age of depressed economies, where value for money is the key consumer priority, social media has become a medium for cost saving group referrals, financial information tools and a community-led effort of sharing knowledge and physical products. As long as the economic state remains perilous, businesses will continue to utilize social media to aid the long-term financial well-being of their consumers.

Related Articles
  1. Stock Analysis

    Social Media Networks That Are Cashing in on the 2016 Presidential Election

    Learn how social media continues to shape the way political campaigns are run. Through social networks, candidates can reach voters directly like never before.
  2. Investing News

    Thursday Intel: Will Q4 Offer a Fresh Start?

    Investor hopes for a fresh start to the world economy in this quarter may be misplaced.
  3. Entrepreneurship

    5 Ways to Make Money on Twitter

    Find out how people are making money online on Twitter, and get some ideas that can turn Twitter into a source of revenue for you or for your small business.
  4. Credit & Loans

    Your Credit Score: More Important Than You Know

    Credit scores affect key aspects of your personal and professional life. Knowing your score and managing your credit input can make a big difference.
  5. Credit & Loans

    Bad Credit? You Can Still Get a Home Equity Loan

    If your credit history is less than stellar and you need cash, you may be able to get financing – but it will come at a price.
  6. Credit & Loans

    Does a Lost or Stolen Credit Card Hurt Your Credit Score?

    Learn the ways in which a lost or stolen credit card can hurt your credit, and understand the steps you can take to protect yourself if this happens.
  7. Credit & Loans

    Refinancing vs. a Home-Equity Loan: How to Decide

    If you want to pay off debt, make home improvements or just get a better interest rate, you need to know exactly what these terms mean.
  8. Credit & Loans

    Millennials Guide: How to Pick the Right Mortgage

    Here’s help in finding the perfect, affordable loan for that home you have been dreaming about.
  9. Credit & Loans

    How Regulations Protect Reverse Mortgage Borrowers

    They're complex animals, which is why there are government guidelines in place to protect borrowers.
  10. Credit & Loans

    Millennials Guide: Buying Your First House

    Millennial homebuyers need to research a lot of things, such as how much to pay, down payments, PMI, FHA loans and special programs for first-time buyers.
  1. Will my credit score suffer from debt consolidation or refinancing?

    You have several options for reducing your debt burden. You can enroll in a professional debt management plan, or consider ... Read Full Answer >>
  2. Can I file for bankruptcy more than once?

    Filing bankruptcy is never a simple decision, but sometimes it is the best thing you can do in your current financial situation. ... Read Full Answer >>
  3. Why would someone change their Social Security number?

    In general, the Social Security Administration, or SSA, does not encourage citizens to change their Social Security numbers, ... Read Full Answer >>
  4. What types of liens are seen as good and which are bad for my credit?

    Creditors that allow purchases to be made through financing often require property to be pledged against a credit account; ... Read Full Answer >>
  5. What are the typical requirements to qualify for closed end credit?

    Typical requirements for a consumer to qualify for closed-end credit include satisfactory income level and credit history, ... Read Full Answer >>
  6. What is the best way to start to rebuild your credit after a bankruptcy?

    Bankruptcies can be devastating to your credit score. Even worse, a bankruptcy will be listed on your credit report for between ... Read Full Answer >>

You May Also Like

Trading Center
You are using adblocking software

Want access to all of Investopedia? Add us to your “whitelist”
so you'll never miss a feature!