- Can you even remember a time before social media, you actually had to talk to somebody to see how they were doing.

- If you wanted to know what was trending, you'd have to go down to the mall, check out the new styles - And arguing with your uncle about politics only happened at family reunions.

Thank goodness - You might also have had a little bit more money in your pocket because of social media's influence on how we spent in a recent survey.

57% of millennials said they overspent their budget because of something they saw on social media.

These tech companies have made it possible for us to stay in touch with friends and family, like never before but they've also created an incredible marketing tool.

Perfectly engineered to part you from your hard earned cash.

(piano music playing) - Social media is such a constant part of our lives.

It's often hard to step back and see the many ways it affects our spending habits.

So let's start with the most obvious one.

Advertising.

- Since ye old shopkeeper posted a flyer in the town square, advertising has become a centuries long arms race to capture consumers, eyes and dollars.

If that flyer was a primitive spear the internet is a laser guided nuclear tipped smart ball.

Unlike old fashioned advertising that relied on broad demographics, like age, race, and income today's digital marketers can create detailed profiles of each consumer tracking their interests behaviors and emotional state.

- Social media has made this process ultra efficient.

By analyzing what posts you like what locations you've visited and even what words you type algorithms can assemble a slate of ads, custom tailored for you.

Well, what's wrong with that?

You might ask.

Better to show me things I want than things I don't, but remember the point of advertising is not and has never been to get you to spend money on things you need or things that will make you happy.

But just to spend money period, the algorithms don't care whether you can afford it or whether you'll regret it.

Their only job is to get you to buy something.

Anything.

Now they're experts on human psychology and they know your specific habits and weaknesses.

It's not a fair fight - But the real cutting edge stuff is branded content where the line between advertising and entertainment is so blurred it's basically non-existent.

Back in the eighties and nineties the TV networks used to show these weird bumpers in between cartoons and commercials.

- (TV playing) After these messages we'll be right back ♪ (whistling) - I didn't think much about it at the time, but those bumpers were actually mandated by the federal communications commission because they worry that children cannot distinguish conceptually between programming and advertising.

Keep in mind, there was a time when people questioned the morality of advertising to children at all.

So that was considered a compromise.

You know, if you're going to manipulate underdeveloped brains with visual stimuli and advanced psychology, at least give a little tykes a heads up.

- That concern seems positively quaint today.

Modern brands produce their own viral videos.

They have social media accounts that get likes and follows just like real people.

And they pay influencers to seamlessly weave their products into their posts.

There are some loose rules around labeling but the general idea is to make the experience of watching it ad indistinguishable from watching actual content.

And it's working - In a recent study.

Researchers found that gen Z audiences were far more receptive to branded content than previous generations.

They're more likely to check out branded photos like and share ads and even tag their friends in them.

They actually prefer their advertising to be a part of the content than separate from it.

- And Hey, that's you no judgment but you should be clear about the relationship.

These ads may feel no different from authentic content but unlike a musician artist or other creator whose goal it is to make you laugh, dance cry or think brands are only after one thing.

Your money.

That is the dark truth.

They worked so hard to make you forget.

- It didn't have to be this way.

Social media platforms could have adopted a subscription model like Netflix or Spotify, where you the customer pay for access to their services.

But sites like Facebook, Twitter and Instagram instead decided it would be more profitable to treat their advertisers as the real customers.

And the product they sell them, is you.

- But we're not entirely blameless in this process whether we know it or not, most users of social media are encouraging each other to spend more money.

In the early part of the 20th century, there was a popular comic strip about a family who obsessed with their social status was always trying to match the fashionable lifestyle of their neighbors.

The title of the strip became synonymous with conspicuous consumption, driven by social pressure.

Keeping up with the Joneses.

If the Jonesses is get a new car, we feel like we need to get one.

If they put in a pool, darn it.

We should too.

We don't want to be left behind.

- Today, We might know this phenomenon by another name.

FOMO.

Our Instagram feeds are filled with reminders that everyone else is out there living their best lives.

Shopping at the trendiest boutiques, staying at five star hotels, eating at gourmet restaurants, sitting in the VIP section of the hottest music clubs.

We're not just comparing ourselves to our immediate neighbors.

We're comparing ourselves to everyone all the time.

And the only way not to feel left behind is to get out there and drop some coin.

(plates breaking) - The problem is that your Instagram friends aren't that much more trustworthy than the advertisers.

We don't admit to each other that the lobster at Luigi's was actually kind of dry and we wish we hadn't spent 75 bucks on it.

Or that those $300 pumps from uptown gave us a blister and we haven't worn them since October.

And we certainly don't share the fact that we missed a payment on our credit card.

Our desire to present our own lives as perfect can turn us into unwitting salespeople for every product and service we use.

Whether or not we were actually satisfied with the purchase.

- Even if social media makes you feel better about yourself, it can still have a negative financial effect.

A study of Facebook users in 2012 found out that people who got a strong, positive feedback from their online social network tended to be more reckless with money and less focused on their goals.

Basically feeling popular online can inflate your ego and make you careless.

- You don't even have to make a post or write a review to influence someone else's spending.

Just liking or following a brand will do the trick.

Humans don't like to be the first to try something new.

We need to know that a product or brand has already been accepted by the group before we spend our money on it.

It's called social proof.

And it's the reason why companies try to accumulate followers and likes on social media.

They know that without any other information, consumers will go with whatever seems to be the most popular option.

Advertisers used to have to fake social proof by making commercials filled with ordinary people using their product.

But now they can actually show you the numbers.

See, can 105 million people be wrong?

- All of these tools will prime a customer for a purchase.

But social media has one more powerful trick up its sleeve to seal the deal.

A seamless shopping experience.

In the old days, you might see a TV ad for a razor scooter and think, Hey, that looks cool.

And then your friends at the skate park tell you how much they love theirs.

And you've made up your mind to buy one with your birthday money, but you still have to get your mom to take you to sharper image before they sell out.

And by the time they get new ones in stock everyone has moved on to Heelys and your life is ruined.

- Babe, you got to let it go.

Today, If a social media influencer shows off a new handbag or visits a fancy resort, there's often a link to where you can buy it or book tickets instantly.

Marketers know that a lot can happen between the ad and the sale and they want to hurry you through checkout while you're still full of FOMO.

While I love how easy the internet has made shopping it can be a curse for people who struggle with impulse purchases.

- For all the talk about how social media lets us express ourselves and show our individuality.

It's also revealed how susceptible we are to social pressure.

- We trust messages more, when we think they come from friends.

We tend to follow the herd when we don't know what to do, and we'll do anything to avoid feeling left out or left behind.

Modern marketers, know these weaknesses in a figured out ways to use them against us.

Which can make social media hazardous to your financial health.

- But social media also offers consumers more information than they've ever had before.

Finding deals and comparison Shopping can be just a few clicks away.

And you can find lots of great advice from financial groups and channels like, oh!

I don't know this one.

So if you're going to keep scrolling and sharing give us a like, or a follow so we can help you stay balanced.