Is Influencer Culture Toxic for Your Finances?

Is succumbing to toxic influencer culture ruining your financial wellbeing?

We all know that social media can cause issues, even if you only follow your friends and family! Simply seeing the highlight reel of your high school aquaintances’ lives can easily leave you feeling inadequate.

But the rise of ~influencer culture~ has created a whole new set of problems, particularly those surrounding finances.

In a world full of sponsored clothing hauls, moving vlogs (where the influencer inevitably gets most of their new furniture for free and doesn’t always disclose it), dream home tours, and travel content, it can be so easy to feel inadequate about our own lives.

And it may cause you to subconsciously spend money on things that you didn’t even know existed until said influencer talked about how amazing said product is.

It’s the 2021 version of keeping up with the Joneses.

Except that instead of just needing to keep up with the Joneses in your particular neighborhood, you are now able to see what millions of Joneses’ are spending their money on via Instagram and YouTube.

This post isn’t to shame influencers. I respect the fact that they can earn a dang good living while sharing their lives online and working for themselves. I even enjoy following some influencers myself!

But it’s important to be cognizant of the intent behind the content we’re consuming: for the influencer to make money.

Comparing our lifestyles to a mega-influencer’s can be problematic, especially when you have no idea how much money they make, how they make that money, and how they manage that money.

I simply want to shed some light on how influencer culture can be toxic (or at worst, detrimental) for our finances.

At the end of the day, influencer marketing is simply advertising. Very sneaky advertising.

What is an Influencer?

According to Influencer Marketing Hub, an influencer is defined as someone who has the power to affect the purchasing decisions of others because of his or her authority, knowledge, position, or relationship with his or her audience.

Woah, what?

Influencers are literally defined with the intent to sell you something and alter your decision-making.

Influencer marketplace, Tomoson, did a study and found that the average business is making $6.50 for every $1.00 spent on influencer marketing.

And 59% of marketers are planning to increase their influencer marketing budget over the next year.

Whatever these influencers are doing, it’s working.

It’s hard to imagine that someone you watch on YouTube can have that much power over your purchasing decisions. I know I’ve been guilty of making a purchase or two because I watched one too many clothing hauls and decided that I had to have a matching loungewear set that I saw in said clothing haul.

And honestly, I don’t regret that purchase! But I probably wouldn’t have made it had I not seen the clothing on YouTube first.

I’ve also had a few “close calls” as I like to call it (looking at you Fabletics- I swear every single influencer is sponsored by them).

You don’t need a monthly leggings subscription to prove that you work out, okay?

No matter how authentic your favorite influencer is, remember that their followers (aka, YOU) support their lifestyle by watching their videos, using their affiliate links, and buying their products.

This isn’t a bad thing, but it’s important to be aware of. Their end goal is to make money.

How do Influencers Make Money?

So how do influencers actually make money? They typically have multiple streams of income.

The most common sources of influencer income come from sponsorships, affiliate marketing, ad revenue, and selling products.

• Sponsorships: a brand pays the influencer directly to promote a product
• Affiliate links: the influencer earns a small commission should you purchase using one of their links
• Ad revenue: revenue from Google Adsense or another ad agency by placing ads in YouTube videos or within blog posts
• Products: digital or physical product that the influencer creates to sell to their followers (think merch, courses, digital templates, etc)

The income cycle can look like this:

You watch an influencer’s YouTube video and earn them money by watching the ads.

The video is sponsored by some company that has paid them directly to create said video.

You are intrigued by the product they are promoting and decide to purchase it using one of their affiliate links.

And since you love said influencer so much and want to support them, you also purchase a piece of their clothing line promoting their YouTube channel.

I know not everyone will decide to follow this exact income cycle recipe when watching YouTube videos, but the data surrounding the payoff for brands is pretty telling.

At a minimum, influencers make money just by having you consume their content!

This post may contain affiliate links, which means I get a small commission should you choose to purchase or sign up through one of my links, at no extra cost to you. I only recommend products that I personally use and believe in. You can read more about this in my disclaimer.

Why Influencer Culture Can be Toxic

While consuming influencer content isn’t bad in and of itself, it can be toxic for our finances if we’re not careful.

Toxic influencer culture can create an environment of comparison and feeling dissatisfied with your own REAL life, and make you think that spending money will solve the problem.

Here are a few ways that influencer culture can be bad for our finances.

Lack of Income Transparency

Have you ever seen an influencer talk about how much money they make from brand deals, affiliate sales, or course sales?

Because I haven’t except for a very select few.

One of the few is @emmasedition on Instagram. She openly shares how much money she makes from brand partnerships and I appreciate the transparency.

In 2021, she’s made over $200,000 from brand deals ALONE.

And that doesn’t include income from her course sales or affiliate links.

The truth is, most of these influencers (especially if it’s their full-time job) are probably making significantly more money than you. Especially if you’re an average American with a pretty average income.

It can get toxic if a $250,000+ income influencer is convincing their $50,000 per year audience to buy luxury products that they don’t need and will put them in a worse financial situation.

Although it is not the influencer’s job to make sure that you can afford the products they’re promoting, it is something to be aware of.

So next time you’re watching an Aritzia clothing haul or a dream home tour full of West Elm furniture, just assume that that said influencer makes at least 5x your annual income.

And keep in mind that a high income does not equal wealth!

Just because someone is great at making money, doesn’t mean that they’re great at managing it.

And judging from the LA YouTuber lifestyle, their net worth is probably a lot lower than it should be given their income.

A regular $60,000 9-5’er could be better off financially than a mega-influencer on YouTube!

The Lifestyle Comparison Trap

Going along with the lack of income transparency, toxic influencer culture can lead to a dangerous lifestyle comparison trap.

Comparing your $50k lifestyle to an undisclosed $200k lifestyle by the way of YouTube videos and Instagram posts is a recipe for disaster.

Especially if that $200k lifestyle is heavily subsidized by free products and experiences that go along with being an influencer.

And this type of comparison will lead you to believe that a fancy lifestyle will make you happier.

And you never know what people are going through behind the screen. Porsches and rooftop bars look awesome online, but what if that person is actually really lonely in real life?

Obviously I’m not saying that every influencer that drives a Porsche is lonely, but you get the point.

The truth is that money doesn’t make you happy, but it does make your life easier.

And an easy life will make you happy to a point (meaning a sudden car repair doesn’t bankrupt you and you can afford to go out with friends every now and then), but having money in a bank account in and of itself doesn’t make you happy.

I don’t think that I’d be any happier driving a brand new Porsche than I am driving my 5-year-old Ford.

Money is a tool. And too much of it without proper financial management can lead to reckless spending, lifestyle inflation, and never understanding what really adds value to your life.

Having less means that you’ll need to carefully prioritize what you’re spending on, meaning that (ideally) each purchase you make should add value to your life and make you happier as a result.

Pointlessly bleeding money on stuff you don’t really care about will make you less wealthy and less happy.

Related: 6 Proven Strategies to Avoid Lifestyle Inflation

Not Disclosing Sponsorships or Affiliates

One of the most toxic parts of influencer culture is when influencers do not disclose sponsorships or affiliates.

The influencer can easily mislead their audience by posting about products and experiences without disclosing that they got they got said product or experience for free.

Their audience is left wondering how they paid for that 9-day trip to the Maldives and may feel less successful because they can’t afford a trip like that.

The problem gets worse when lots of influencers are doing this, leading you to believe that “everyone can afford trips like that, and I’m a loser if I can’t afford it.”

The truth is, the influencer probably couldn’t afford that trip anyway! But they got it for free and didn’t tell you, and now you feel inadequate.

Getting sponsored or free product can also lead to less than honest reviews of products. A brand wouldn’t reapeatedly sponsor an influencer to bash their product over and over.

I know that many influencers promote products that they loved before they got sponsored and are honest. But you have to read between the lines and understand how the sponsorship could affect the review of the product.

The FTC has pretty strict rules regarding disclosure of affiliate links and sponsorships. They are legally required to disclose the relationship with a brand when promoting products.

And I think influencer culture is changing for the better surrounding this topic as well.

Nowadays, you’ll usually see “thanks to [insert brand here] for sponsoring this video” or #ad on Instagram posts. This means that the brand paid them and/or gave them product for free.

If they link you to Amazon or RewardStyle, it’s most definitely an affiliate link.

But toxic influencer culture is still alive and well, so be on the lookout for ~undisclosed partnerships~ when consuming influencer content.

It’s Advertising Disguised as a “Community”

At the end of the day, full-time influencers earn a living by montezing their online presence.

There is absolutely nothing wrong with this (and I’m having a go at it with this blog too!)

But it’s important to understand that the “community” the influencer is creating is one that earns them money.

At it’s best, you make great connections through a community, watch their YouTube videos, and occasionally buy a product or two through their links.

At it’s worst, influencer marketing is paid advertising disguised as a community.

The influencer influences you so much that you drain your bank account and feel less than to “be a part of their community.” And they’ll do it without disclosing partnerships or income.

You can usually tell when an influencer is in it just to make money. So don’t ignore your intuition.

And remember that the unfollow button is just one click away.

How to Combat Toxic Influencer Culture

So now that we know the ins and outs of toxic influencer culture and how sneaky it can be for our wallets, what do we do about it?

The easiest and most obvious thing to do is unfollow every influencer or quit social media altogether. I know this isn’t realistic for most people (me included), but we can clean up our following lists.

Just like a healthy diet is important for a healthy body, the content we consume (photos, music, TV, etc) can have a profound affect on our mental health.

So go through your following list and unfollow anyone who makes you feel bad about your life, seems inauthentic, or tempts you with too many clothing hauls.

Being aware of how influencers make money will also go a long way in making you more cognizant about how their lifestyles are made possible.

And understanding the amount of income some of them make combined with free products, services, and experiences mean that their lifestyle is totally unrealistic for normal people like you and me.

And there’s no guarantee that they’re actually happier or more fulfilled than you, anyway!

And finally, it’s easy to compare our lives to others when we are unsatisfied with our own. If you’re truly happy and fulfilled in your own life, you’re less likely to feel jealous or resentful of others’ success.

So instead of watching video after video, brainstorm some ways to feel happier in your own life. What really matters to you? Do you have any passion projects you’ve been putting off?

We could all spend less time on social media and go for a walk, read a book, or call a friend. The true things that matter in life aren’t eating at the fanciest restaurants, having the nicest home, or wearing the trendiest clothes.

It doesn’t matter if I have an immaculately decorated home if I don’t have a meaningful community to share it with.

A luxury vacation means nothing if crippling credit card debt is causing so much stress that you can’t sleep.

Driving a Porsche to a job you hate so that you can make your monthly car payment is sad.

Building wealth usually means doing the opposite of what most people are doing.

Living below your means, getting out of and avoiding debt, and investing a good chunk of your income into low-cost index funds will make you wealthy.

Not buying every influencer-promoted product.

Don’t let lavish influencer lifestyles and subconcious marketing tactics make you feel like your life is worse than theirs.

Turn off your phone and connect with people in real life.

You’ll probably forget about such and such influencer, anyway.

-Megan