Discussing Finances on Social Networks: Is it Safe?

Is it really safe to use Tweet What You Spend, Blippy and Bundle to track your expenses or to even discuss your personal spending habits? In a world rife with identity thieves and other financial predators isn’t it wise to keep some modicum of privacy, especially when it comes to your hard earned money?

Well many consumers don’t thinks so and are using social networks to freely track and converse about their monetary preferences regarding what they buy, how they save money and even their indulgent spending practices. Some websites, like Bundle, even compile that data so you can research what other people in your age bracket and salary range are paying out on everyday items. It’s the cool, new way to budget.

However, there’s a catch. Unlike Quicken and other budgeting tools, these communities are not one-way conversations with a device or application. It’s a public or semi-public forum. Your personal finances are on display. Bundle, for instance, allows members to view other member’s information anonymously, which means a total stranger could be tracking your spending habits and comparing notes to what he or she spends. While some communities, like Blippy, allows you to choose what purchases you publish, it’s still opening the door to potential financial issues:

• Keeping Up with the Jones – Prior to the Internet age, you only knew what the Jones bought when you saw them put it on display. However, now you can view the Jones’ purchases as they make them. This might encourage you to go out and spend money that’s not on your normal budget. Or worse, be a competition where you have to go out and buy something “better” than your friends.
• Getting Green with Envy – If you manage to ignore the temptation of going out and buying the newest, latest thing your friend has, you might still find yourself feeling bad about yourself and your finances. You might start resenting that your friend can afford to go shopping when you’re stuck at home clipping coupons. Or worse, start fighting with your loved ones because you can’t have what others do.
• Being on the Radar – If your friends see that you’re able to afford the latest items, they might see it as an opportunity to start pressuring you for financial help. After all, if you can afford the iPhone 4, surely you could lend me $20 the next time we go out. You might start creating a false sense of prosperity that your friends will resent or try to take advantage of. If you’re not careful who you friend on your network, you could be opening yourself up to scammers and identity thieves.

These social networks claim that they can help you save money. More often than not, the atmosphere on these networks are encouraging you to spend. If you think that being part of a social network is going to give you the motivation you need to stop spending and start saving more, then use these tips to try to make the experience a safe one:

• Know the Rules – Make sure that you read the Terms of Service and Privacy Policy of these social networks. If you’re still comfortable sharing your information, then join.
• Be Selective with Your Friends – Make sure to screen your network, not just for people that you know, but also for friends that have similar values and financial goals. If you’re looking to save, don’t add your friend that loves to go on shopping sprees after each paycheck.
• Don’t Automate or Post Everything – Never give anyone a full bird’s eye view of your finances. Pick and choose the items you want to post. Your friends will love that you’re not clogging up their stream and you can still keep a little privacy at the end of the day.
• Don’t Spread Yourself Too Thin – Remember, being a part of a social network is being part of a community. Make sure you have the time to read your friends’ posts and be supportive. Social networking is not a one-way street.
• Avoid Arguments and Flame Wars – Be very careful about offering negative criticism or sarcasm online. Sometimes your words can be taken out of context and you can lose a friend in real life. When you have a concern, try to do it in private and not on the stream for all your friends to see.

Social networks and other web-based tools have made our world exciting, interesting and transparent. It can also create more problems than it solves. These social networks are not face to face so maybe it’s easier to share intimate details, but make sure it’s in a way that’s safe for you and your finances. Use your common sense and always ask yourself, “Am I really comfortable discussing this in public?” As long as you say yes, then post away.

About the Author

The following post is from Kathryn Katz, a Certified Personal Finance Counselor who works for Consolidated Credit in Ft. Lauderdale, Florida. Their non-profit agency helps families through financial crisis using credit counseling, debt consolidation and financial education.