EFFECT OF FOMO ON FINANCIAL DECISION-MAKING AND SPENDING BEGAVIOUR AMONG COLLEGE STUDENTS

Abstract

This research investigates the impact of the Fear of Missing Out (FOMO) on the financial decision-making and spending behavior of college students in India. In a digital era where social media constantly showcases peer lifestyles and experiences, FOMO has emerged as a critical psychological driver influencing consumption patterns. This study aims to explore how FOMO affects students' saving habits, spending decisions, emotional well-being, and long-term financial planning, based on a survey of 90 students aged 18–26. Using descriptive statistics, correlation analysis, and cross-tabulations performed in SPSS and Excel, the study assesses the relationship between FOMO intensity and financial behavior indicators. Key Variables in the Study • Frequency and intensity of FOMO experiences • Peer comparison tendencies and fit-in purchasing behavior • Influence of decision-making factors (peer advice, family influence, advertisements) • Financial planning behaviors (saving before spending, setting spending limits) • Post-purchase emotions such as regret and dissatisfaction • Interest in and exposure to financial literacy education Key Findings 1. High FOMO Prevalence with Financial Consequences: Over 60% of respondents reported experiencing FOMO often, particularly triggered by social media posts related to shopping, travel, and dining. FOMO significantly correlated with impulsive spending and weakened saving behavior. 2. Peer Influence Amplifies Spending: Students exhibiting stronger peer comparison tendencies were notably more likely to make unplanned or non- essential purchases, often exceeding their monthly budgets. v 3. Emotional Aftermath of FOMO Purchases: 4. A considerable portion (around 58%) of students who made FOMO-driven purchases reported post-purchase regret, feelings of guilt, or dissatisfaction with their spending decisions. 5. Financial Literacy as a Moderating Factor: Students with prior exposure to financial literacy (through courses, workshops, or self-learning) demonstrated better spending discipline, higher saving rates, and lower susceptibility to FOMO-driven purchases. 6. Saving Behaviors and Spending Limits: Only about 32% of students reported consistently saving before spending, and fewer than 40% actively set spending limits — both behaviors were negatively impacted by higher FOMO scores. 7. Desire for Financial Education: A large majority (over 70%) expressed interest in receiving more structured financial education to better manage emotional spending triggers and improve budgeting skills. Implications for Stakeholders • For Educational Institutions: There is a strong need to integrate emotional aspects of financial decision-making, including FOMO awareness, into college financial literacy programs. Teaching students coping mechanisms to resist impulsive urges can foster better long-term financial health. • For Financial Advisors and App Developers: Designing tools that alert users about emotional spending, promote goal-based savings, and gamify responsible spending behavior can effectively support youth in managing FOMO-driven tendencies. • For Policymakers: As FOMO becomes an increasingly powerful consumption driver, awareness campaigns and early interventions can help prevent future financial vulnerabilities among the youth. vi Conclusion The study highlights that FOMO is not just a fleeting emotion but a profound factor shaping the financial behavior of young consumers. While college years are formative for building financial habits, the constant digital exposure to peers' curated lifestyles makes students vulnerable to emotional spending and financial overextension. By promoting financial literacy, emotional resilience, and responsible consumption, stakeholders can help students turn financial decision-making into a conscious, empowered process rather than a reactive one driven by fear or comparison.