Last year, Business Insider surveyed more than 600 adult Gen Zers about the financial responsibilities that caused them significant stress, and almost half indicated they were concerned about saving money.
Amanda Clayman, a financial therapist who hosts a podcast called "Emotional Investment," defined money dysmorphia as "a negative and unrealistic perception of one's financial wellness or financial position." In a survey conducted in December by Credit Karma, 43% of Gen Z respondents and 41% of millennial respondents reported experiencing money dysmorphia, whereas 25% of Gen Xers and 14% of respondents 59 or older said the same.
Money dysmorphia goes beyond wanting to pay off some credit-card debt or to contribute more to a 401(k). Clayman described it as "pervasive worry, vigilance — like an internalized feeling of unsafety with money," even when there aren't pressing financial problems to solve.
Clayman argued that younger generations are more likely to have warped views of their finances — but that might be more financially stable than they give themselves credit for.
Big life transitions bring on introspection
In general, Clayman said, people prone to catastrophizing "find that money is something that is very easy to worry about."
She said people in their mid-20s to mid-30s also tend to going through more life transitions — they might be saving up for a wedding, a house, a career change, or a family.
But she added that these people might also not have a clear idea of how much they need to have saved up, other than a lot.
She said that the more ambiguous or abstract a financial goal is, the easier it is to feel like you're nowhere near achieving it.
"Once you're in a later stage of life, you have a little bit more information that you can access," she said.
Self-comparison fuels money dysmorphia
Clayman argued that a tendency of younger people to compare themselves to others they see on social media could warp their sense of financial benchmarks.
"We can never know all of the intimate details of a person's financial picture and their history," she said. "We are creating a pattern that tells a story based on the incomplete information that we're picking up."
That couple with the dream wedding could be in credit-card debt. That friend who goes on four international trips a year could have a trust fund.
Constantly being bombarded with images of luxury restaurants and impeccable homes can perpetuate undue worry and doubt about one's own finances.
"All we have to do is open Instagram and be flooded with confirmation that there are lots of people out there who are having fun and going places."
Some expectations around money are dated
While parents can teach their kids valuable lessons about saving, not all the money rules that pertained to Gen Xers and boomers translate to today's economy.
For example, Clayman said, generations growing up in the postwar era were more likely to have pension plans, while retirement is largely self-funded now. Plus, factors like inflation and a higher cost of living can make it harder for younger people to stick to strict saving schedules.
Clayman said that while not all advice about money is wrong, it can become harmful if someone starts hoarding money or overworking to try to follow it. She suggested the most productive route for people feeling anxious about money is to take in different financial perspectives and make a budget — one that's realistic and shame-free.
FAQs
Self-comparison fuels money dysmorphia
What is financial dysmorphia millennials? ›
Money dysmorphia is a negative or unrealistic perception of one's financial wellness. A financial therapist says millennials and Gen Zers are more prone to experiencing money dysmorphia. She said life transitions, self-comparison, and outdated ideas about money can fuel this perception.
Do you suffer from money dysmorphia? ›
“Individuals who have an underlying mental health condition, suffer from low self-esteem or who have experienced financial trauma such as poverty, unemployment or underemployment are at higher risk of experiencing money dysmorphia,” says Marter, adding that those with less support are also more likely to experience ...
How to deal with money dysmorphia? ›
If you think you may have money dysmorphia, Flora suggests the following strategies to manage it:
- Write down your thoughts. “Perspective around money has roots in mindset and the way we see ourselves on an individual level,” she says. ...
- Refine your version of financial success. ...
- Streamline your finances.
So perhaps it isn't surprising that more than 40% of both generations report having money dysmorphia and 48% of Gen Z say they feel behind financially and 59% of millennials feel the same.
What is the millennial burnout syndrome? ›
'Adulting' related anxiety and errand paralysis are a couple of the markers of true 'millennial burnout'- affecting 22-36-year-olds who are overworked, over-applied, overcommitted, over comparative, and struggling to overcome.
What is a millennial mentality? ›
Millennials are motivated by living an exciting life, receiving recognition from their peers, and finding romantic love. They describe themselves as indulgent, living life to the fullest, and without boundaries.
What is the mental illness of money hoarding? ›
Financial hoarding can be a symptom of financial anxiety. The Journal of Financial Therapy defines the disorder as a 'miserly spending style toward both self and others; money is viewed as something to be hoarded for future catastrophes'.
What mental illness causes overspending? ›
If you experience symptoms like mania or hypomania, you might spend more money or make impulsive financial decisions. You might have an addiction or dependency which makes you spend money.
Why do I feel shame around money? ›
Think about what's behind your money shame. We often have deep-seated beliefs about ourselves that we don't question -- maybe we grew up being told we were bad at math and that's stopping us from making a budget. Or perhaps we overspend because we don't feel confident.
Persistent worry: Money anxiety can bring a constant, often intrusive worry about finances. This might be concerns about having enough in your bank account to pay bills or fears about future financial stability and retirement savings. The worry can affect every decision related to money.
Why do I feel bad when I spend a lot of money? ›
It's not uncommon to feel guilty about spending money, even when it's a necessary purchase, since you may believe the funds could be better applied elsewhere. Perhaps you could buy something better, or maybe you could use the cash to pay down debt or save for the future.
What are the symptoms of a money disorder? ›
This behavior is characterized by a persistent urge to make purchases, an inability to resist the temptation to spend, and continued spending despite adverse financial consequences. Compulsive spending can result in mounting debts, financial instability, and a negative impact on one's overall financial well-being.
Why are so many millennials struggling financially? ›
Some reasons that Millennials have difficulty saving include extremely high rents in the U.S., high student debt, experiencing a financial crisis and health pandemic during their careers, high inflation, and increasing housing demand.
Why do millennials have less wealth? ›
Millennials on average also have much more debt than other generations—much of it student loans and credit cards—lower levels of home ownership, and lower marriage rates, all of which greatly affect wealth accumulation.
What do millennials value most in life? ›
Millennials value experiences, personalization, authenticity, and transparency. They appreciate companies that are socially and environmentally conscious, and also value flexibility, communication, and collaboration.
What are the financial behaviors of Gen Z? ›
Most Gen Zers don't prioritize saving for retirement. Yet far more expect to retire before age 65 than among any other generation, per Transamerica. Moreover, “retiring before the age of 50” is a top financial goal for 17% of Gen Zers—well above the 8% for overall consumers, according to an August 2023 Empower survey.
What percent of millennials are stressed about their personal financial? ›
Millennials and Gen X are also regularly stressed about their finances: 58% and 61% respectively experience anxiety about their finances at least three days a week. Nineteen percent of Gen X respondents and 14% of millennials reported feeling stressed about money every day.
What are millennials spending habits and why they buy? ›
Millennials Expect More From Brands
And they are extremely loyal to brands who engage with and listen to their needs. 70% of Millennials stopped doing business with a brand after a poor customer service experience. Over 50% repeatedly buy the same single brand to solve a problem.
Why are millennials so prone to anxiety? ›
More importantly, these worries indicate just how concerned they are about what's coming next—about making the right choices today in order to ensure a stable future. In truth, decision-making itself may be the number-one reason why millennials are so depressed and anxious, and why they feel the need for psychotherapy.
