I love it and I hate it.
As a blogger it’s fun to connect with like-minded people who I would never have met in person. On the other hand I don’t use my personal accounts much at all.
My Facebook feed is constantly bombarded by “selfies,” “duck faces,” and the same annoying e-cards over and over. While this is enough to drive anyone up the wall (unless you’re one of the people who post these things) there’s another downside to social media: the role it plays on your finances. Plus, we've discussed in the past how Facebook costs you money.
Browsing your Facebook feed, posting a couple of tweets, or connecting on LinkedIn may seem innocent enough, but the truth is it could wreak havoc on your finances. Here’s how.
According to a recent article published by CNN Money, your Facebook friends could impact your chances of getting approved for a loan.
A handful of lenders will now search your Facebook friends when you apply for a loan through them. If you have a friend who has made a late payment or defaulted on one of their loans your chances of getting approved will be drastically lowered.
If you’re on the market for a new loan your best bet might be deleting your Facebook account altogether.
Lending Club has been assessing social media accounts in addition to normal credit checks to help determine credit worthiness for three years.
There are now companies that assess your credit worthiness by your social media behavior. These companies will watch your activity on sites like Facebook and Twitter to help determine your credit worthiness. The information you post, frequency in which you post, and your friends list is all taken into consideration.
This could become the norm for banks and lending institutions in years to come. This is one more reason why you should seriously think about what you post.
Loss of Employment
If you’re in the market for a new job, delete any embarrassing comments or pictures of yourself from your social media accounts. More and more employers are searching for your name in Google and checking your social media accounts to get an idea of what type of person you are.
Negative comments, drunken pictures, or constant complaining could seriously decrease your chances of getting hired.
Don’t think this is just for new hires either. Your boss could check out your social media accounts at any time. If you want to find a new job or hold on to the one you have you need to watch what you post.
A possible identity thief has a far greater chance of hacking into your accounts if you share a lot of information on social media. If the identify thief can verify your birthday, parents' names, and city you grew up in, he’ll be one step closer to getting access to your online accounts.
This is why you should only add people you know to your social media accounts. You can also help avoid identity theft by setting your account to private and limiting the amount of information you share.
You will never know your identity has been stolen unless you check your credit regularly or go to apply for a loan and get denied. Consider using a free service like Credit Karma to check your credit score and see if you've been impacted by identity theft. Remember, don't pay — Credit Karma is free as long as you cancel within seven days!
Social media can be great for connecting with old friends. But what happens when those friends are constantly publishing pictures of themselves in their big houses, fancy cars, and brand new toys or clothes? You probably feel a little envious — at least for a little while.
Social media definitely pressures you to “keep up with the Joneses.” If you’re in debt, on a tight budget, or trying to save money, social networks like Facebook can increase the temptation to spend.
Just remember everything is not always what it seems. Those friends posting pictures of all their expensive possessions might just be deep in debt. Worse yet, those material possessions could be covering up an unhappy life.
Limit What You Share
Social media can play a bigger role in your finances than you think. You can minimize your risk by only friending people you know and by limiting the amount of personal information you share.
It’s easy for people to see the information you post online. Remember only to share information that you’re not going to regret posting in a month from now.
What other things should social media users remember when it comes to your finances?