The Smartphone: Many of us carry them in our pockets or purses; some of us may even sleep with them nestled under our pillows. In his new book iDisorder, Professor Larry Rosen argues our reliance on technology creates many health side-affects, and may also make us more narcissistic. That in particular had me asking: Are Smartphones good for our finances? Maybe not.
Smartphones, Narcissism, and Spending
Rosen argues that we use our Smartphones as platforms for social media excessively, and constantly updating Facebook statuses or sending out Tweets with “you” as the focus, turning our attention on ourselves. Similarly, flipping through Facebook photos of (sometimes perfect) strangers and Tweets from celebrities may make us feel depressed about our lives in comparison to others.
The combination may be deadly for your spending. A study funded by the National Science Foundation and National Institute of Health found that people who are feeling sad might be willing to spend four times more on a product than people who are feeling either happy or neutral. And this mainly occurs when the sadness triggers “self-focus,” the same Perfect Storm of emotions Rosen argues we feel when immersing ourselves in social media outlets.
While Facebook and Twitter keep us connected, they may be making us more likely to overspend. And on a Smartphone, that’s a uniquely difficult problem.
Smartphone Apps: Saving or Spending?
There are countless apps out there to help people manage their money more effectively and to keep track of their accounts, investments, and financial goals and progress. No doubt having this easy access takes some of the worries out of finances, helping people to constantly be “in-the-loop” with their own money.
But not all apps are created equal. Daily deal apps like Groupon—regardless of the deal they provide—inundate your phone with “alerts” enticing you to spend. Popular restaurant chains like Domino’s have apps that make buying food almost effortless. Not to mention that some of the largest online retailers in the world, such as Amazon, Zappos and many, many more have made their mark on the application world.
One minute you’re checking your finances with your Mint app, then you’re on Facebook, and next thing you know you’re on Amazon, trying to find something to buy to cheer yourself up. Smartphones put an unparalleled amount of information and purchasing power perpetually within arms reach, and the two may not always be mutually beneficial for your budget and your savings plans.
There’s a great convo about this happening at /r/BehavioralEconomics.
If you have an account, please head over and weigh in!