- Roughly 45% of Gen Z and millennials are obsessed with the idea of being rich (44% and 46%, respectively)
- 43% of Gen Z and 41% of millennials experience money dysmorphia
- Another 48% of Gen Z say they feel behind financially, along with 59% of millennials
In late 2023, a new trend emerged online and across social media where people began questioning how well they were doing financially. The phenomenon coined “money dysmorphia” occurs when people feel insecure about their financial standing, no matter the reality of their situation. The problem? The growing trend is having a negative impact on people’s finances, especially younger generations.
According to a new study conducted by Qualtrics on behalf of Intuit Credit Karma, 29% of Americans experience money dysmorphia. For the purposes of this survey, money dysmorphia is defined as having a distorted view of one’s finances that could lead them to make poor decisions. This problem was much more pronounced among younger generations with 43% of Gen Z and 41% of millennials saying they experience money dysmorphia, compared to 25% of Gen X and just 14% of respondents aged 59 or above.
Of those who experience money dysmorphia, 82% say they feel behind on their finances. That’s compared to 29% of respondents who don’t struggle with the same financial insecurity. Zooming out, nearly half (48%) of Gen Z and 59% of millennials say they feel behind financially, likely contributing to feelings of financial inadequacy. While many admit to feeling behind, 59% of respondents also report feeling financially stable, demonstrating the distortion between one’s perception of their financial stability and the reality of their situation.
37% of respondents who experience money dysmorphia reported having more than $10,000 in savings with 23% of those having more than $30,000 in savings. That’s well above the median amount of savings for Americans, which hovers around $5,300. However, respondents who do not suffer from money dysmorphia were more likely to have savings – and more of it. According to the study, 52% of Americans without money dysmorphia have more than $10,000 in savings. Of those, 32% have more than $50,000 saved.
Comparison, the thief of joy
Money dysmorphia could be fueled by people’s obsession with being rich at a time when being rich seems increasingly out of reach. More than one-quarter (27%) of Americans say they’re obsessed with the idea of being rich. This was especially true for younger generations with 44% of Gen Z and 46% of millennials admitting to being obsessed with the idea. More than half (54%) of respondents who experience money dysmorphia say they’re obsessed with the idea of being rich, compared to just 12% of those who do not struggle with the condition. Despite obsessing over the idea of extreme wealth, 52% of Americans say they don’t think they will ever be rich. That number jumps to 69% when looking at Americans with money dysmorphia.
Beyond concerns about never being rich, 95% of Americans with money dysmorphia say it negatively impacts their finances. Of those, 40% say money dysmorphia has held them back from building savings or led them to overspend (38%) and take on more debt (32%). Another 30% say it’s held them back from saving for a home and paying down debt.
“Money dysmorphia is kind of like today’s version of keeping up with the Joneses,” said Courtney Alev, consumer financial advocate at Credit Karma. “A lot of people are examining their finances and comparing themselves to their peers, people on social media, and even celebrities, which is bringing up feelings of inadequacy. This distortion between perception and reality can prevent people from taking steps towards achieving their financial goals. A few ways to overcome money dysmorphia are to take an honest look at your finances, set clear goals, make a plan, and, most importantly, keep your eyes on your own paper. If your goal is to build up your savings, start by doing an audit of your finances to see where in your budget you can make room for savings. From there, you can schedule automatic payments from each paycheck to help hold you accountable and incrementally increase your savings.”
Methodology
This survey was conducted online within the United States by Qualtrics on behalf of Intuit Credit Karma from December 18 to December 26, 2023 among 1,006 U.S. adults above the age of 18.
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