Do you ever open Facebook to find all your friends having more fun than you? Ever think, I wish I was on that trip, at that bar, or flying first class, too? Do you find yourself sucked in, almost vicariously, to others’ lives?

Marketing Mavericks

Personally, I answered yes to all three questions. Facebook is an interesting development for the marketing and social worlds. It’s the single greatest advancement to the combinatory industry of social marketing. The company is a multi-billion dollar organization based solely on marketing a vast treasure trove of user data.

In recent years, they’ve forced users to verify their identities with state and/or federal IDs. The swath of data and information is a honeypot for the company. Even if users stopped using Facebook altogether, the treasure trove would still exist – the imprint made. Facebook could sell that data for vast sums of money.

Friends Make Friendly Advertisements

Marketers have long known that friends, family, neighbors, and coworkers – word of mouth – are the best forms of advertising. Malcolm Gladwell’s Tipping Point asserted that key figures tip the popularity of products. Facebook is at the fulcrum – parlaying it’s data into profits and inserting advertisements into the stream of new updates.

When you used to login into Facebook, you’d see ads on the side of your friend’s status updates. But that wasn’t good enough. Research suggests that the most highly clicked areas tend to be the easiest to see. Makes sense, right? The eyes start at the top left and top middle of any page. By placing ads inline with your friends status updates, Facebook can market to you easier and ensure more traffic to companies.

Your Face, Their Message

Nowadays, Facebook seems creepy. Zuckerberg, their founder and CEO, once questioned why people just trusted him with all this data. He seemed quizzical about why he deserved such volunteering of data, but he wasn’t stopping it.

Not too long ago, the company was sued for using profile pictures of friend groups to advertise products. Let’s say your friend “Likes” Nike. Nike is interested in selling more shoes. They know that by leveraging your friends picture, you may be more likely to buy their product. It’s called social proof.

After a nasty lawsuit, profile pictures went by the wayside. People weren’t advertised products by their friends’ faces, and there was even a settlement deal for those that had been victims of this advertising tactic. Unfortunately, it might come back again.

Facebook has been trying to leverage its user data with a new privacy policy. Inside the policy, it states that a profile picture could be analyzed and may be used for marketing purposes. That’s a heavy price to pay for being a member. There likely wouldn’t be an opt-out feature.

Can You Be Frugal On Facebook?

Thankfully, Facebook has been compelled to delay the latest privacy policy revisions. Popular outcries and public interest groups have made a loud and clear message: don’t do this.

But a larger question about social forces and advertising remains. Facebook may be the single greatest marketing platform that ever existed. If I were to post an update that included a picture to my brand new Nikes, my friends may have no idea I was sponsored to share it. I’m profiting off this social display – the simple share and spend.

Suddenly, companies are in the network and it’s making frugality a challenging skill.

There’s Tim Cook! Oh, and there’s Eddy Cue! Look at their styles and panache, as they deliver the most anticipated presentation of the year. I’m literally salivating at the beauty of the devices being introduced. Pop open the soda, chips, candies, and settle in. This is like watching the Super Bowl of technology; except, the entire show is one big advertisement for Apple.

New software, hardware, and features are all wrapped up in their presentations. Every time you see the Apple logo, music, and a powerful CEO take center stage, you know you’re going to see something new. This bastion for consumerism is also one of my favorite things to watch. I’m a technophile, iPhone 5 owner, and (previously) wasteful smartphone upgrader. I want to be in-the-know. In the past, it also meant spending a small fortune each year on unnecessary gadgets – made to make my life easier – that was causing me to go into deeper debt. The irony.

Contracts And Upgrades

In case you’re waking from a coma, the 21st century has brought great technological revolution. But it’s also meant fine print, two-year contracts, and plenty of strings attached. For phone buyers, most people are stuck overpaying for service and not able to leave a company for fear of hefty termination fees.

This puts many smartphone buyers in a bind. Technology evolves faster than two-year contracts. For the desperate, iPhone buyers can expect to spend over a half grand to upgrade outside of contract. In fact, to get the 64 GB iPhone 5 off-contract, you’ll spend about $849 before tax. That’s a hefty fee to have the latest technology in your pocket.

Apple’s Release Cycle

Despite a sizable population being excluded from an upgrade every year or so, Apple developed its own, ambitious release cycle. Every year, the iPhone gets an upgrade.

Here I am, watching another wonderful release date. What will come out next? These guarded devices are shrouded in secrecy and speculation until the moment it hits the stage. What a wonderful sight!

But there’s a fundamental quandary that encourages people to spend more than they should: upgrade now or later?

Upgrade Now And Later

The product design appears flawless, and the iPhone has been poured over to check for flaws and areas for improvement. You could literally be holding the latest technological innovation if you buy it today.

Maybe you’re like me, and bought your first iPhone a few years back. I’ve had them since the 3GS. Every year, prior to my frugal life, I would upgrade to the newest version. My bank account took a beating because of this wayward spending, but I didn’t seem to care.

See, Apple may be flawless designers, but they are even better business people. They’ve studied consumer behavior, reaction, and sentiment. They know how to make the most money they can and still keep you happy.

Here’s the secret: Every year, they design a product that is mostly evolutionary, but borders on revolutionary for the device (they even use this terminology in their speeches). Each year’s redesign is minor, but important. Between iPhone 4 and 4S, there wasn’t a major design change, but users got to experience “Siri” in the latter version. Between 4 and 5, there are major, visible distinctions.

By changing the phone a little bit every year, it attracts people from two years back. Their phones are feeling ancient compared to this technology, contracts are due to expire, and they want the latest version. But the important part is that the changes are just enough to attract people that are one year into contracts, too.

Now, the two-year old iPhone holders are instantly ready to upgrade. They see no reason not to! The one-year old iPhone owners are carefully protected. Apple doesn’t want you to feel like your device is already outdated – even though it is. Because Apple creates an evolutionary device, owners can feel good about keeping their product – knowing it’s still relevant and feeling respected – but also have the burning desire for that next new thing. That’s the sweet spot: between respect and desire.

Innovation, Stifled By Planned Growth

Technology was never meant to be choked back by product cycles and plans. Apple can blame the small changes year-to-year to technological limitations, supply-chain management, and various research and development functions. The honest truth is that they likely hinder growth to assuage current customers and lure in new ones into a perpetual, yearly buying cycle.

Development can be anarchic. When major corporations hold the keys for improvement, sometimes they control the growth rate to aid in profits. But what if corporations lost this control or willingly gave it up? How fast could our technology change, then?

Either way, I’ve gotta stop watching these keynote speeches. I’m afraid I’ll be lured into buying an iPhone 5C.

I’m lucky to have such fantastic friends. They’re an exciting and diverse group of people that continually test me. They know just how to support me when I’m at my best or worst. No doubt, I’m here today, a graduate student, because I had fantastic friendships and relationships to guide me here. I owe them a lot. But, did you know that friends affect your budget, too?

Friendly Budgets

…People who felt lonely or isolated were 87 percent more likely to make a risky financial decision than those with social support. (Source)

As the study stated, loneliness begets risky financial decisions. It’s important to realize that spending carelessly goes beyond self-control. Instead, successful budgets are all about preparation.

Even temporary feelings of social isolation—say, if one of your buddies blows you off this weekend—can trigger stupid monetary decisions, Duclos says. To protect your bottom line, spend a few minutes online looking through your own Facebook pics if you’re solo. (Source)

If you feel yourself becoming vulnerable to loneliness, get social. Find organizations that may alleviate isolation and aid in friendship development. Be active and mindful of growing desires to go shopping and notice when these arise. Maybe it’s loneliness, and not that those jeans look amazing.

Depression And Spending

We’ve long known that loneliness and its consequence, depression, have terrible psychological effects. Needless to say, when you’re depressed or saddened, you’re more likely to spend. The quick fix and high of spending can entice, but the long-term effects are quick to wear off.

This is an unfortunate fact for your budgets. Psychological distress and careful spending don’t get mix. By being proactive, you may be able to circumvent increased spending and spiraling budgets, but you may want support.

Bring Your Friends

Becoming frugal isn’t usually a solitary venture. It requires soul searching and introspection for overcoming some of life’s greatest financial pitfalls. But it also necessitates including friends and family – roping them in to help encourage you along the way.

Early on in my Frugaling journey, I began telling people about my debt, plans for saving more, and how I was beginning to cut costs. I started bringing lunches to work and school. By making my frugality visible, I was also holding myself accountable in front of those that support me most.