In a recent study conducted by Intuit Credit Karma, it was found that both Generation Z and millennials share a notable preoccupation with the concept of wealth, despite facing significant financial challenges.
The study, which surveyed 1,000 Americans, disclosed that 44 percent of Gen Z and 46 percent of millennials reported an obsession with becoming rich, in stark contrast to the 27 percent observed in the broader population.
A key factor contributing to this trend is identified as “money dysmorphia,” a term used to describe feelings of financial insecurity irrespective of one’s actual financial situation.
Among Gen Z and millennial respondents, 43 and 41 percent, respectively, reported experiencing money dysmorphia. Notably, only 29 percent of the overall surveyed population admitted to similar feelings, with no clear correlation to their financial standing.
Surprisingly, the study revealed that 37 percent of those grappling with money dysmorphia had savings exceeding $10,000, and 23 percent had amassed more than $30,000. This contrasts sharply with the median savings in America, which stands at a mere $5,300.
Courtney Alev, a consumer financial advocate at Credit Karma, likened money dysmorphia to a modern-day version of “keeping up with the Joneses.” Alev emphasized the impact of social media, where individuals frequently compare their financial status to peers and celebrities, fostering a distorted perception that hinders progress toward financial goals.
The financial struggles experienced by Gen Z and millennials greatly contribute to their strong focus on wealth. The study indicates the pressing concerns surrounding the affordability crisis in the housing market and the alarming levels of student debt, both of which have been identified as major factors.
Lindsay Bryan-Podvin, a financial therapist and founder of Mind Money Balance, noted that the allure of being rich may stem from the perception that even a middle-class lifestyle is increasingly unattainable.
Social Media’s Money Dysmorphia Impact on Gen Z
The impact of growing up during economic downturns, stock market crashes, and the digital age, where social media amplifies financial comparisons, has left many Gen Z and millennials fearing financial instability.
JP Geisbauer, a certified financial planner, showed the role of social media in intensifying money dysmorphia. He claimed that continuous exposure to the affluence of others on these platforms could heighten an individual’s sense of inadequacy.
Of those experiencing money dysmorphia, a striking 82 percent felt behind on their finances, with 40 percent reporting hindrances to savings and 38 percent admitting to overspending.
Concerns about the financial future are compounded by the looming possibility that Gen Z and millennials may face challenges in achieving a comfortable retirement, especially with Social Security predicted to dry up by the early 2030s.
Financial planner Nancy Hite highlighted the shifting perception of retirement age, stating that maintaining financial independence becomes increasingly unlikely for the current generation.
Despite these challenges, there is hope for those grappling with money dysmorphia. Courtney Alev suggests taking an honest look at finances, setting clear goals, making a plan, and avoiding unnecessary comparisons. Scheduling automatic payments from each paycheck can also aid in building savings over time.
Millennials and Generation Z are presently confronted with financial uncertainties; however, the study concludes with a positive outlook, indicating that a substantial realignment of wealth is in store for these cohorts.
The departure of Baby Boomers could result in an additional $84 trillion in wealth being bequeathed to their offspring, predominantly millennials and some members of Generation Z. This could have a major effect on the financial landscape of these generations in the years to come.