How Social Media is Draining Your Wallet and Mental Health: Indian Entrepreneur's Candid TEDx Talk Offers Solutions Through social media, we are constantly exposed to images of luxury, success, and the 'perfect life.' These images, fuelled by algorithms, can trigger compulsive buying habits.

By Anita Pandey

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Somdip Dey

In the fast-paced digital era, social media has become ingrained in nearly every aspect of our lives. Whether it's sharing moments with friends, staying updated on trends, or following the lives of influencers and brands, these platforms shape our perceptions and decisions. However, as Somdip Dey, an MIT Innovator Under 35 in AI & Robotics, points out in his viral TEDx talk, "Is social media the reason you're broke?", the true cost of social media can be far more damaging than many realize. For Dey, social media didn't just affect his worldview—it led him to spend over £500,000 (approximately INR 5 crore) on luxury goods, including designer watches and high-end cars, over the course of a decade.

Dey, who serves as a Lecturer in Data Science at York St John University and a Professor of Practice (AI/ML) at Woxsen University, reflects on his own journey in the TEDx talk, where he candidly reveals how his quest to keep up with the seemingly perfect lives on social media triggered a spending spree. As the Cofounder, CEO, and Chief Scientist of Nosh Technologies, a company leading the way in AI-driven food waste reduction, Dey's narrative isn't one of lack but rather one of excess, which is precisely the point he is trying to make.

"The digital world is full of curated images that make us feel we need to keep up with a certain lifestyle," Dey commented. "I got caught in this cycle myself, buying items that, in hindsight, didn't contribute to my well-being or happiness. Now, I want to use this platform to help others recognize these traps and break free from them."

Originally delivered at the TEDx University of Essex, Dey's talk has since been selected as a TEDx Editor's Pick, a prestigious honour reserved for talks with global impact. Airing on January 23rd, 2025, the video has already stirred significant discussion about the hidden financial costs of social media and the pressures it places on personal finances.

Dey emphasizes in his talk that over 80% of consumers' purchasing decisions are influenced by social media posts from friends, and more than 75% are swayed by brands they follow online. These statistics reveal how digital influence, often overlooked, plays a critical role in shaping our social perceptions and financial habits. Through this lens, Dey explains two key psychological concepts: the "Man in the Car Paradox" and the Diderot Effect.

The first concept, introduced by financial expert Morgan Housel, suggests that people don't buy luxury items—like a high-end car—just for the object itself but for the status and social admiration it confers. The Diderot Effect, coined after the French philosopher Denis Diderot, explains how one purchase can trigger a chain reaction of further unnecessary purchases as individuals try to match their lifestyle to a new item. Both concepts underscore the influence that social media-driven images of success can have on our spending decisions.

"Through social media, we're constantly exposed to images of luxury, success, and the 'perfect life.' These images, fuelled by algorithms, can trigger compulsive buying habits," Dey explains. "They make us feel that we need these things to be happy or successful, leading to financial instability."

But Dey doesn't stop at pointing out the problem. He offers practical advice for combating the algorithm-driven cycle of overconsumption. He encourages individuals to limit social media usage to 30 minutes per day to avoid the pitfalls of mindless scrolling and impulsive purchases. He also advises following only those accounts that add real value to life, whether educational, inspiring, or genuinely beneficial. Dey further recommends implementing a 48-hour pause before making any purchases influenced by social media, particularly those linked to time-limited offers designed to trigger FOMO (fear of missing out).

"These steps aren't just about saving money; they are about taking back control of your financial future and mental well-being," Dey concludes.

His TEDx talk has garnered significant attention and sparked important conversations about the growing financial and mental consequences of overconsumption in the digital age. In addition to his academic and entrepreneurial success, Dey was awarded the Outstanding Achiever in Innovation, Science & Technology at the India UK Achievers Honours in 2023, alongside public figures like Parineeti Chopra and Raghav Chadha. This recognition further cements his place as a leader in the fields of AI, robotics, and sustainable technologies.

Dr. Dey's TEDx talk, "Is social media the reason you're broke?", is now available on the TEDx YouTube channel. Watch it to explore how social media influences our spending habits and how to take control of your financial future.

Anita Pandey writes on business and entrepreneurship. She has been observing and tracking business trends in India for over a decade and takes special interest in analyze emerging trends that shape business decisions. 
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