Just picture looking into the mirror and seeing a reflection that is nothing like what is actually there. This situation captures the core of body dysmorphia, a disorder in which a person becomes fixated on a perceived physical fault that they believe others may not see.
But what if this distortion extends beyond just physical appearances to encompass financial matters?
With the advent of digital connectivity, social media has taken on a crucial role in the lives of young people. These platforms are great for communication and information exchange, but they also have a negative aspect that can have a big influence on the financial security of young people.
Given that the younger generation is constantly exposed to messages about success, wealth, and material items, this can frequently lead to a mistaken perception of money and its significance.
Peer pressure, social media, and advertising all frequently lead to a misguided understanding of money and its significance. Money dysmorphia is a problem that can have serious repercussions on the financial security and mental health of young people.
Enter money dysmorphia
Never passing the opportunity to rebrand a phenomenon that already exists, millennials and their Gen Z frenemies acknowledge that they suffer from “money dysmorphia,” which is the inability to feel secure about one’s financial status even when the real picture shows little to no reason for alarm.
According to a recent Credit Karma report, 29% of Americans report having a distorted perspective on their financial status. This misperception frequently results from feeling inadequate because of comparisons to others’ financial situations.
Furthermore, the report indicates that 41% of millennials and 43% of Gen Z believe they have an inaccurate impression of their financial situation. Although it may seem like just another type of worry brought on by TikTok, money dysmorphia is a serious condition that can lead to people making bad or ignorant judgements.
What is money dysmorphia?
An unhealthy focus on one’s financial situation is the hallmark of money dysmorphia, sometimes referred to as money disorder or financial dysphoria. It can be explained as an obsession that, regardless of one’s secure financial situation, generates feelings of fear, inadequacy, and guilt.
Those who suffer from money dysmorphia may display the following behaviours:
Persistent feelings of financial insecurity: They have reasonable income and savings, but they still worry about running out of money.
Spending reluctance: They may refrain from making purchases, even for necessary bills or scheduled leisure activities, out of a crippling fear of running out of money.
Overly comparing oneself to others: Social media’s exaggerated depictions of prosperity can intensify emotions of financial inferiority and create inadequacy.
Financially compulsive behaviours: Excessive saving or overspending is a coping strategy used to address underlying worry.
Understanding generational perspectives on financial mindsets
It is not unusual to have a fear-based financial perspective as opposed to an informed one. Those of us whose grandparents were part of the ‘Greatest Generation’ would be familiar with the scarcity mentality of the Great Depression.
It’s acceptable to see the world with a scarcity mentality. One’s perspective on and behaviour with money will be shaped for the rest of their life by a childhood spent in financial hardship. The problem with money dysmorphia is that it might mislead someone whose experience is stability rather than shortage.
This is not to say that all millennials and Gen Zers grew up in households with steady finances and have gone on to lead contented lives in the middle class. When it comes to having early exposure to “once in a lifetime” or “generation-defining” experiences, both generations have suffered setbacks.
Therefore, it may come as no surprise that over 40% of both generations report having money dysmorphia, that 59% of millennials feel the same way about money, and that 48% of Gen Z feel behind financially.
Millennials and Gen Z in the age of information overflow
The constant availability of knowledge, via social media and the news, is a significant change for both generations when compared to earlier ones. Gen Z in particular has never known a world without social media, search engines, or a constant news cycle that allows them to quickly verify information. When Apple originally released the iPhone, the oldest members of Gen Z were only ten years old. The oldest millennials were 26 years old, and I had just finished high school at the time.
Gen Z and millennials are constantly hearing how difficult life is. How costly and difficult it is to purchase a home. The total expense of child care and raising children. How large companies that were once thought of as role models for aspirational youth are now eliminating jobs. The fact that the US economy is, for the time being at least, fairly strong can easily be obscured by these headlines.
The difficulties that younger adults face are genuine. However, they can create an unhealthy mental narrative that suggests the other shoe could drop at any time, that you won’t be able to afford a house in the future, let alone afford to have children in the future, or that there will be another pandemic that forces you to live off savings for months.
Social media, urban living, and the obsession with wealth among millennials and Gen Z
Pictures of people flaunting expensive goods, taking first-class flights, and dining at exclusive restaurants flood social media, adding to younger consumers’ unease. Living in cities exposes them to frequent displays of wealth.
It’s no wonder 45% of Gen Z and millennials are fixated on getting rich, as per a Credit Karma study. It’s hard to imagine financial improvement when you start with a negative outlook.
But rather than living in a state of perpetual anxiety, Gen Z and millennials may find a sense of stability by calculating how much money would help them sleep better. Putting figures on a sheet and setting up a timeline is more beneficial than obsessing over an ill-defined objective like “getting rich.”
When someone confesses to having dysmorphia, they are already admitting that their opinions about their finances aren’t always accurate. It’s a sensible beginning. But the truth is that there is no easy way to overcome this mindset.
A well-screened financial advisor or financial counsellor may be of use. However, some may think of taking more drastic action and giving up on the social network that initially caused their unfounded fear.
(Tashia Bernardus)