Younger Gens Experiencing “Money Dysmorphia”—A Distorted View of Their Financial Wellbeing
By Thierry Malleret, economist
A recent survey (conducted in the US) warns that almost half of Gen Z and millennials (respectively 43% and 41%) experience “money dysmorphia”, the situation when people feel insecure about their financial standing irrespective of the reality of their financial situation. This corresponds to today’s version of keeping up with the Joneses, but turbo-charged by social media. Gen Z and millennials are forced-fed all sorts of gloom-and-doom news (about education and personal indebtedness, job cuts, childcare costs, and so on) while being inundated on Instagram, TikTok and YouTube with images of celebrities hopping from one exclusive resort to the next, shopping around the world in their private jets, and pursuing an inaccessible lifestyle. This constant dissonance ends up exacerbating financial insecurities and sentiments of inadequacy. In turn, this distortion between perception and reality can prevent people from taking the appropriate steps towards achieving their financial goals.
Concomitantly, groundbreaking new research shows that people with very low monetary income living in remote Indigenous communities seem as happy, if not happier, as those in high-income countries. The study found that people surveyed in these isolated communities (whose estimated annual monetary income is less than $1,000 per person) reported an average “life satisfaction score” of 6.8 out of 10. This is slightly better than the average life satisfaction score for all OECD countries (6.7).
Some small communities even reported an average happiness score of more than 8, higher than that of Finland, the highest-rated country in the OECD. These results challenge many widely held assumptions about money and happiness—or, put differently, financial wealth and life satisfaction. In the words of one of the co-authors: “The strong correlation frequently observed between income and life satisfaction is not universal and proves that wealth—as generated by industrialized economies—is not fundamentally required for humans to lead happy lives.” This suggests there is much greater diversity and flexibility than commonly thought on how best to achieve life satisfaction, or personal wellbeing.
