Report: Younger generation experiencing ‘money dysmorphia’

by Renata

While reviewing your financial well-being, did you ever mistakenly think that you were doing better than expected? And did that happen to lead to any poor financial decisions? If your answers to those questions were “yes,” then a new study suggests you may have something called “money dysmorphia.”

Research conducted by Qualtrics on behalf of Intuit Credit Karma looked into the phenomenon. Just for clarification, the study defines “money dysmorphia” as “having a distorted view of one’s finances that could lead them to make poor decisions.” With that definition in mind, their research found that 29% of Americans apparently experience the depressing phenomenon.

This particular problem seems to be prevalent among the younger generations as well. According to research, 43% of Gen Z respondents and 41% of millennials said they experience money dysmorphia. That is almost 20 percent more than Gen X and older respondents.

Of those who experience the issue, 82% say they feel as though they are falling behind on their finances. Thirty-seven percent said they have at least $10,000 in their savings accounts, and some have over $30,000. Both of these numbers hover well above the median amount of savings for Americans, which is $5,300.

Those who didn’t experience money dysmorphia were likely to have more stashed away, possibly contributing to their feelings of financial stability. Of those who didn’t feel the dysmorphia, 52% had at least $10,000 in savings.

So, if two people can have the same amount in savings, what exactly is causing the feeling of money dysmorphia? Well, research suggests that there is a bigger obsession with being financially rich at a time when that is somewhat harder to obtain. More than half of those with money dysmorphia said they are somewhat obsessed with the notion compared to just 12% of those who don’t struggle with the condition.

Courtney Alev, consumer financial advocate at Credit Karma, likens the condition to an exaggerated version of unhealthy comparison. Alev says:

“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.”