Rosalind Evans
In an era dominated by digital interactions and social media, a new financial phenomenon known as “money dysmorphia” is emerging, particularly among young adults. This term describes a distorted perception of one’s economic situation, exacerbated by the relentless comparison to others through online platforms. According to a report by Credit Karma, nearly 29% of Americans confess to experiencing money dysmorphia, with the prevalence soaring to around 43% in Gen Z and 41% in millennials. “Money dysmorphia is like today’s version of keeping up with the Joneses,” explains Courtney Alev, a consumer financial advocate at Credit Karma. This condition affects individuals’ self-esteem and financial decisions, leading many to pursue an elusive sense of wealth despite potentially having above-average savings.
The implications of money dysmorphia extend beyond mere dissatisfaction. Edelman Financial Engines highlights a growing disparity between perceived financial success and reality, noting that despite a 37% increase in average household net worth between 2019 and 2022, only 14% of Americans consider themselves wealthy. The quest for financial validation is further complicated by social media, with platforms like Instagram contributing to a heightened sense of inadequacy. Isabel Barrow, director of financial planning at Edelman Financial Engines, emphasizes the correlation between dissatisfaction with one’s economic status and social media usage, urging individuals to reassess their digital consumption and economic psychology. “Sometimes you have to set up guardrails for yourself,” Barrow advises, promoting a more mindful approach to spending and self-perception.
As we navigate this digital age, addressing the psychological aspects of financial well-being becomes imperative. Carolyn McClanahan, a certified financial planner and CNBC’s Advisor Council member underscores genuine happiness’s importance over material success. “You have to make sure you are happy. Stuff isn’t going to make you happy,” she states. This sentiment echoes the need for a paradigm shift in measuring success and satisfaction, advocating a balance between financial health and mental well-being.
Money dysmorphia presents a significant challenge for young adults, urging a reevaluation of how we engage with social media and perceive financial success. By fostering awareness and implementing strategic measures, we can mitigate the impact of this phenomenon, paving the way for a healthier, more realistic relationship with our finances and ourselves.
