The Psychology of FOMO: How Fear of Missing Out Drives Irrational Financial Decisions
In the fast-paced, social media-driven world we live in, the fear of missing out, or FOMO, has become an increasingly prevalent phenomenon. This psychological experience, characterized by a persistent anxiety about not being part of rewarding experiences that others seem to be enjoying, has far-reaching implications that extend beyond social circles and into the realm of personal finance. FOMO can lead individuals to make impulsive and often irrational financial decisions, driven by a desire to keep up with perceived societal norms and maintain a sense of belonging. In this article, we will delve into the psychology behind FOMO and explore how it can negatively impact financial decision-making.
Understanding the Roots of FOMO
FOMO is deeply rooted in human psychology and has its origins in our evolutionary need for social connection and acceptance within a group. Throughout human history, being ostracized or excluded from a social group could have dire consequences for survival. This innate drive to belong has been amplified in the digital age, where social media platforms provide a constant stream of curated glimpses into the lives of others, often portraying a highlight reel of experiences and achievements.
