Overwhelming evidence suggests social media has a negative effect on self-esteem.
That’s not only true for how people feel about their appearance and social status, but also their financial well-being and economic standing.
A new term, “money dysmorphia,” aims to describe the distorted view of one’s finances that nearly one-third, or 29%, of Americans say they now experience, according to a recent report by Credit Karma, often from comparing their financial situation to others’ and feeling inadequate.
“Money dysmorphia is kind of like today’s version of keeping up with the Joneses,” said Courtney Alev, consumer financial advocate at Credit Karma.
Not surprisingly, money dysmorphia is even more prevalent among younger generations, according to Credit Karma. Roughly 43% of Gen Z and 41% of millennials struggle with comparisons to others and feel behind financially.
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“This has been a problem for a very long time, but social media has taken it to a whole new level,” said Carolyn McClanahan, a certified financial planner and founder of Life Planning Partners in Jacksonville, Florida.
Many of those who experience money dysmorphia have above-average savings, Credit Karma also found. However, they are also likely to admit to being obsessed with the idea of being rich.
There is a “distortion between perception and reality,” Alev said.
Only 14% of Americans consider themselves wealthy
That feeling of being well off is increasingly elusive, almost regardless of how much money you have, a separate report by Edelman Financial Engines also found.
The average household’s net worth has soared in recent years, rising 37% between 2019 and 2022, according to the survey of consumer finances from the Federal Reserve.
Still, only 14% of Americans would consider themselves wealthy, according to Edelman Financial Engines, and the bar is only…
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