FOMO & Herd
Mentality
PERSONAL FINANCE – MRS. TREADWAY
Question?

Your teacher asks a multiple choice question as
part of a fun, whole-class game you’re playing.
The overwhelming majority of your classmates
raise their hands for answer choice B. However,
you are pretty confident the answer is D.

Do you change your mind and pick answer B or
stick with your answer, D? Explain.
The Bandwagon Effect

The tendency to choose an option that the
majority chooses is due to a cognitive bias
called Herd Mentality, also known as the
Bandwagon Effect. Watch this video to see how
Herd Mentality can impact our decisions.

https://www.youtube.com/watch?v=0IJCXXTMrv8
Bandwagon Effect Article
https://sketchplanations.com/the-bandwagon-effect

What are some reasons that we might choose to
“go with the herd” rather than stick with our own
choice?

Give an example of when you’ve experienced or
seen herd mentality in your life.
FOMO: Our Relationship with Social
Media

Another cognitive bias that is very similar to Herd
Mentality is FOMO, or the Fear of Missing
Out. Watch this video and learn more about
what FOMO is and then answer the questions
below.

https://www.youtube.com/watch?v=q5zv9_ZgYoQ
FOMO: Our Relationship with Social
Media

Describe a social media post that would make you feel FOMO.
Explain why it would make you feel this way.

Describe a time when you have chosen to do something because
of FOMO.

What is one realistic step you can take to combat FOMO from social
media?
Purchases due to FOMO

What percentage of people make purchases
due to FOMO?

60% of people make purchases because of
FOMO, usually within 24 hours.
Purchases due to FOMO
As you see from the previous question, FOMO
can influence us to make a lot of impulse
purchases! Read this article to dive deeper into
how a FOMO and YOLO (You Only Live Once)
mindset can impact our personal finances. Then,
answer the questions.
 https://www.forbes.com/sites/forbesmarketplac
e/2020/04/23/what-are-fomo-and-yoloteaching-us-about-ourmoney/?sh=2335e7b12dd8

Purchases due to FOMO

It’s Friday night and Noah’s friends are all going out for dinner.
Noah has already maxed out his monthly budget for dining
out, but he doesn’t want to miss out on the opportunity. What
are the trade offs Noah will have to make if he decides to:

eat out with his friends?

eat at home and skip dinner with his friends?

What is a risk of constantly having a YOLO mindset when
making financial decisions?

What is one thing you can do to prevent yourself from making
an impulse purchase?
PANIC BUYING

One extreme example of how herd mentality and
FOMO can influence peoples’ purchasing decisions
is the panic buying that occured at the start of the
COVID-19 pandemic. Watch this video to learn
more and then answer the questions.

https://www.youtube.com/watch?v=3AZBLfh6vwo
PANIC BUYING

Explain how herd mentality and FOMO caused panic
buying of items such as hand sanitizer, toilet paper,
groceries, and other products at the start of the
pandemic.

Did you witness or experience panic buying during the
pandemic? Did it influence your (or your family’s)
purchasing decisions?
GAME STOP

Another example of how herd mentality and FOMO
can influence peoples’ financial decisions is the
investing craze around GameStop that took place
in January 2021. Watch this video to learn more
about what happened. Then, answer the questions.

https://www.youtube.com/watch?v=k3vw7Q1uk0g
GAME STOP

Explain how herd mentality and FOMO caused so many
people to invest in GameStop stock.

What was the risk so many people were taking when
they “jumped on the bandwagon” and invested in
GameStop?
HOME BUYING - FOMO

We’ll explore one final example of how herd mentality and FOMO
can impact our financial decisions - homebuying! Read this article,
stopping at How To Avoid a Housing Decision You’ll Regret. Then,
answer the questions.

https://money.com/home-buyers-regret-buying-hot-market-tips/

What costs - both monetary and other - might some people pay for
buying a house too quickly due to FOMO?

Buying a house is likely pretty far off into the future for most teens.
What lessons can teenagers still take away from this article?