Generation Z and millennials suffer from financial insecurity whether they are doing well or not, experts have found.
“Financial dysmorphia” is a psychological condition in which a person has a “distorted view of their own finances, which could lead them to make poor decisions.”
Social media and the desire to get rich are the two main reasons leading to a rise in the worrying trend among young people. This in turn leads to financial anxiety and stress, even if they have thousands of dollars saved in the bank.
According to a Credit karma According to one study, 43 percent of Generation Z and 41 percent of millennials report suffering from it.
Helen Baker, financial advisor and founder of On Your Own Two Feet, told FEMAIL that goals are key to breaking the cycle of financial dysmorphia and are also linked to personal values.
Helen Baker, financial advisor and founder of On Your Own Two Feet, told FEMAIL that goals are key to breaking the cycle of financial dysmorphia and are also linked to personal values.
“Money dysmorphia” is a phycological condition in which a person has “a distorted view of their finances that could lead them to make poor decisions.” This is likely due to comparing your financial situation to others seen on social media (stock image)
What are the signs of financial dysmorphia?
Courtney Alev, consumer finance advocate at Credit Karma, said: “Many people look at their finances and compare themselves to their peers, people on social media and even celebrities, which leads to feelings of inadequacy.
“This distortion between perception and reality can prevent people from taking action to achieve their financial goals.”
People with financial dysmorphia often compare their financial situation to that of others, which makes them feel behind. The obsession with being rich while feeling completely out of reach is considered another root cause of the problem.
Excessive use of social media doesn’t help and only fuels insecurity, which exacerbates feelings of dissatisfaction with personal finances.
Ms Baker said: “What we see on social media is the highlight of people’s lives, it’s all just a facade, like you’re driving past a big house with a BMW out front.
“We are never shown the entirety of someone’s life. All is not what it seems.’
She added that it is “unrealistic” and “unattainable” for an ordinary person to compare themselves to a celebrity – even if it can be used as inspiration or motivation.
The desire to be rich while feeling completely out of reach is considered another root cause of the problem, leading to impulsive spending habits in an attempt to feel rich or satisfied with one’s financial situation (image from stock)
All of this can lead to impulsive spending habits in an attempt to feel rich or satisfied with one’s financial situation.
Yet overall, regardless of reaching financial milestones or savings goals, young people still feel behind, continuing the cycle of financial dysmorphia.
Baker added that people with financial dysmorphia also tend to never celebrate their achievements, such as saving $10,000.
“We always look at what we don’t have. Sometimes you just need to step back and be grateful for what you have – maybe like money to buy food or a roof over your head,” she said. declared.
“What I’ve also noticed is that younger generations want to wear fancy clothes and drive nice cars, but they’re all rented and not owned – this comes from the fact that not everything is what we think.”
How to overcome financial dysmorphia
To change this way of thinking, Baker recommends taking a detailed and honest look at your finances, then setting realistic financial goals.
Then make a plan on how to achieve the listed goals and then gradually work toward them without comparison to others.
Rather than budgeting, Baker recommends the term “spending and investing plan” to give individuals the freedom to manage their finances.
“Budgeting can sometimes feel like handcuffs, but having a plan in place allows you to continue buying what you love while saving some of your income,” she explained.
It’s also ideal to schedule automatic payments after each paycheck to help you track your savings and spending. This way it is easier to see how much money is left after allocating a certain amount to savings.