Gen Z is facing a troubling financial trend, a phenomenon that has been labeled “money dysmorphia,” which an expert suggests is deeply affecting their mental well-being. The term “money dysmorphia” was coined by financial therapist Amanda Clayman, who describes the condition as “a negative and unrealistic perception of one’s financial well-being or financial position.” In essence, this trend highlights how young people are experiencing pervasive anxiety and distress related to their finances, even when their actual financial situations may not be as dire as they perceive.
According to Clayman, money dysmorphia manifests as an “internal sense of insecurity with money,” which can often be linked to feelings of vigilance and overwhelming concern about their financial future. The result is that many members of Gen Z are grappling with the stress of their perceived financial inadequacies, which may be exacerbated by unrealistic expectations and comparisons with others. This phenomenon comes at a time when financial stability is a constant concern for many young adults, as they face rising living costs, inflation, and uncertain job markets.
This condition has become particularly pronounced in an era where social media plays a significant role in shaping perceptions of success and happiness. Gen Z, often the first generation to grow up with constant access to social media, is subject to the pressure of seeing their peers post images of lavish lifestyles, vacations, and seemingly effortless success.
According to Clayman, the ease with which one can scroll through platforms like Instagram creates a distorted view of reality. “We can never know all the intimate details of a person’s financial picture and their history,” she points out. This environment of constant comparison leads young people to believe that others are living lives of luxury, which only amplifies their own financial insecurities.
Additionally, the financial context in which Gen Z is living is vastly different from that of older generations. Clayman notes that older generations did not face the same pressures related to the rapid pace of digital transactions, constant advertising, and the social pressures that young people experience today. The rise of cyber payments, the gig economy, and the need to navigate financial uncertainty without the same support structures that were available to previous generations have left many Gen Z individuals feeling overwhelmed.
Furthermore, many young people are increasingly turning to their parents for financial support. According to recent surveys, more than half of Gen Z members report relying on their parents’ financial help to save for big life milestones such as marriage, buying a home, or starting a family.
Clayman emphasizes that the context in which older generations achieved these milestones was different. “There was a different environmental context for older generations doing these things,” she explains, pointing out that previous generations had more stable job markets, greater access to pensions, and different financial structures to rely on.
The rise of “loud budgeting” among Gen Z, where individuals publicly share their frugal practices, is another response to this pervasive financial anxiety. While the intention behind “loud budgeting” may be to embrace and celebrate frugality, it also speaks to the deep insecurity that many young people feel about their financial standing.
The widespread sharing of budgeting tips and savings strategies can create a sense of competition or pressure to keep up with others, even if they are not truly financially secure. This public display of financial management might mask the anxiety that many Gen Z individuals are experiencing behind the scenes, as they attempt to project an image of financial stability while struggling with internal concerns.
Clayman notes that the act of hyper-saving, or overextending one’s efforts to save in an attempt to feel more secure, is another way young people cope with their financial stress. “The pressure all this puts on young people to hyper-save may be an attempt to feel better and to calm the level of anxiety we’re experiencing,” she suggests. However, this can also lead to burnout, as the constant pursuit of savings and financial goals takes a toll on mental health and overall well-being.
In addition to the challenges posed by social media comparisons and the push for hyper-saving, the economic landscape today is increasingly difficult for young people to navigate. The cost of living continues to rise, and inflation has added to the financial strain. With the traditional idea of relying on pensions for retirement becoming less viable, Gen Z is left to figure out new ways to plan for their future, all while grappling with mounting financial stress. The inability to rely on the same financial safety nets as previous generations has created a sense of instability for many young people, making it harder for them to envision a secure financial future.
The idea of retirement itself has changed drastically in the modern age, as pensions and employer-based retirement funds become less common. Instead, younger generations are often left to their own devices when it comes to planning for their future.
The pressure to secure a stable financial future in the absence of traditional retirement structures is just one of the many issues that Gen Z faces as they navigate adulthood. With student loan debt, rising rent prices, and the unpredictability of the gig economy, the financial stress on Gen Z is palpable.
Clayman points out that financial therapy and increased awareness of mental health challenges related to finances are essential in helping young people address their insecurities. While money dysmorphia is a relatively new term, the feelings of anxiety and stress surrounding finances are not. Clayman stresses that seeking professional help, whether through financial therapy or counseling, can help individuals work through their financial anxieties and develop healthier relationships with money.
It is also important to recognize that financial insecurity does not have a one-size-fits-all solution. While some may find relief through budgeting techniques or seeking financial advice, others may need to focus on building self-esteem and addressing the emotional aspects of their financial situation. The idea that one’s self-worth is tied to their financial standing can be a harmful belief that perpetuates stress and anxiety. Clayman encourages young people to challenge these ideas and find ways to build a more balanced and healthy relationship with money.
In conclusion, the rise of money dysmorphia among Gen Z is a reflection of the complex and often overwhelming financial landscape that young people face today. The pressures of social media, rising costs of living, and a lack of traditional financial safety nets have left many feeling anxious and insecure about their financial futures. As Gen Z continues to navigate these challenges, it is important for them to recognize that financial well-being is not solely determined by appearances or comparisons with others. By addressing the underlying emotional factors and seeking professional guidance, Gen Z can work towards developing a healthier relationship with money and a greater sense of financial security.
