The Role of Social Media in Shaping Economic Decisions and Enhancing Financial Awareness

Description

Page: 523-526

Anshu Singh and Sajid Parwez (Department of Economics, Sona Devi University Ghatsila, Jharkhand)

The proliferation of social media has fundamentally altered the landscape of information dissemination, extending its influence into the complex domain of personal finance. This paper provides a comprehensive analysis of the role social media platforms play in shaping individual economic decisions and impacting financial awareness. Through a systematic review of contemporary literature, this study explores the dual nature of social media as both a valuable tool for financial education and a potential source of misinformation and behavioral manipulation. The analysis reveals that social media democratizes access to financial information but simultaneously exposes individuals to significant risks, including speculative herd behavior, financial scams, and the persuasive, often unregulated, advice of “finfluencers.” Key moderating factors, such as financial literacy, digital literacy, and individual psychological biases, are examined to understand their critical role in mediating the effects of social media exposure on financial outcomes. The findings underscore the necessity for enhanced educational initiatives focused on digital and financial literacy to empower individuals to navigate the digital financial ecosystem effectively. Furthermore, the paper discusses the implications for policymakers, educators, and financial institutions, highlighting the need for adaptive regulatory frameworks and proactive communication strategies. This study contributes to the growing body of knowledge in behavioral economics by contextualizing financial decision-making within the pervasive influence of digital environments (Hernawan, 2025).