Read the full transcript of award-winning scientist Somdip Dey’s talk titled “Is Social Media The Reason You’re Broke?” at TEDxUniversity of Essex 2025 conference.
Listen to the audio version here:
TRANSCRIPT:
The Power of Social Media on Financial Decisions
SOMDIP DEY: Let me ask you a question first. If you had access to half a £1,000,000, how would you use it?
A. Buy a house B. Start your own business C. Buy luxury products and items D. Buy luxury cars
Most people usually would use such an amount of money on either A, buy a house, or B, start their own business. However, I ended up wasting more than half a £1,000,000 on buying luxury products and cars in the last decade. No, this is not a talk about bragging about my financial mistakes. Rather, it’s a cautionary tale to talk about the invisible influences of social media in our lives.
Every day, we end up spending over 150 minutes on social media apps, and our screen time on our phone can actually prove it. Yet often, we do not realize the grasp that social media has on our daily lives, from our mental health to our spending habits. Forbes estimates that over 80% of consumers’ purchases are influenced or swayed by the social media posts of their friends. And over 70% to 75% of the purchases are swayed by the companies that they follow online. And this is not just a problem for a particular demographic; rather, it’s an issue that spans across income levels, cultures, even generations.
The Impact on High Earners
Even wealthy people earning over £100,000 a year face the consequences of social media in order to keep up with the expensive lifestyle. Seeing a Ferrari in Santorini’s blue-domed houses often makes us wonder how wonderful it would be to have that lifestyle.
This phenomenon is called the “man in the car paradox” as described by Morgan Housel in the book, “The Psychology of Money.” Whenever we see something really desirable, we often end up believing that luxury and fashion items that we see on social media are our answer to living a more fulfilling life. However, that is not true.
The Independent newspaper reports that over 25% of people earning more than £100,000 a year live their lives from paycheck to paycheck. So, again, it’s not just an issue for one particular person or one particular demographic. It’s for everybody; even the wealthy suffer. My own life as a tech entrepreneur let me believe that luxury was the passport to belonging. And I was so wrong back then.
Steps to Limit Social Media Influence
So after realizing the influences that social media plays on our life, especially towards our financial decisions, I have made strict rules that I follow in order to be less influenced or not be influenced:
Limit your social media usage to a maximum of 30 minutes in a day. If you have to interact or text with your friends and family, do it within that time. However, the less time you spend on social media, the more time you have to spend on something else in your life. Remember, time is the most valuable resource that all of us have, regardless of whether we are poor or rich. If we lose time, we can never get it back.
Only follow accounts that add value to your life. That may be educational content or truly inspiring accounts that help you learn something new. However, be wary that everybody on social media is selling something, either that’s a product or a service or an agenda. Be aware of this.
Implement a 48-hour rule whenever you feel that you are influenced to buy something on social media. And definitely stay away from time-limited items because those items are designed to play into your FOMO psyche (fear of missing out), so that you end up buying that item because you don’t want to miss it. But, again, it is designed so that you buy it in such a way. So be aware that other people on social media might be playing on your FOMO, so it’s always good to allow yourself some time to think it over.
Now I want to give another example so that I can really bring the point home.
If we look back to the 18th century and talk about a famous philosopher called Denis Diderot, he ended up in an overconsumption cycle after buying a scarlet robe. Diderot spent most of his life in poverty. However, through the sale of his library, he ended up having a big lump sum of money that he ended up using to buy more and more products or items that would go well with his expensive scarlet robe. This phenomenon is called the Diderot effect, which is the urge for us to buy more and more just to match one purchase.
The Diderot effect plays out on social media every single day, propelled by technology. We see an influencer wearing a really nice shirt. We buy it. We see an influencer wearing a really nice watch. We buy it. However, the purchasing doesn’t just stop there. You end up buying more and more from there so that you can complete the whole look.
So it’s very important for us to understand and follow the steps that I have mentioned earlier so that we do not fall prey to the Diderot effect in our lives. And we can have more time to invest in our future instead.
