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Money Dysmorphia: How Social Media Skews Financial Reality for Young People
Social media platforms, like Instagram, are awash with images of luxury and leisure, fostering a culture of online spending and comparison. Martini glasses perpetually chime in digital feeds, while curated photo collections showcase upscale dining experiences with lavish details such as tartare, soufflés, and expensive Luxardo cherries. Travel snapshots feature seemingly endless cabana retreats and extravagant swimwear collections. Juxtaposed with these aspirational online displays is the stark reality of economic news, highlighting fluctuating tariffs potentially impacting everyday consumer goods, volatile market trends illustrated by erratic charts, and financial experts voicing concerns over retirement savings, triggering anxiety even among younger generations far from retirement age. This dichotomy creates a sense of financial unease and “money dysmorphia,” particularly among young adults.
The Instagram Illusion vs. Economic Anxiety
“Visually appealing cuisine shared online, viral fashion trends on platforms like TikTok, and the latest must-have work accessories are constantly presented on social media feeds,” notes Devin Walsh, 25, a marketing professional in New York, describing the compelling purchases that dominate her online experience, even amidst economic uncertainty. “Simultaneously, there are frequent comparisons to the Great Depression,” she adds, highlighting the confusing contrast between online extravagance and real-world financial anxieties.
Navigating the “Boom Boom Aesthetic”
For young adults already navigating economic instability, social media feeds saturated with opulent vacations and high-end restaurant bookings can be particularly unsettling. This amplified display of affluence is fueled by what trend analysts term the “boom boom aesthetic.” This emerging trend, embraced by fashion brands, influencers, and consumers alike, represents a resurgence of ostentatious, “old-money” consumption – think Gordon Gekko-inspired power suits and previously shunned furs. This creates a disconnect from the financial realities faced by many.
Money Dysmorphia: A Distorted Financial Self-Perception
This pervasive online culture contributes to widespread economic self-doubt, with many young individuals expressing to friends and therapists their struggles to keep pace with perceived social media standards. Many grapple with saving money while simultaneously succumbing to impulsive purchases, leading to feelings of guilt and anxiety, often described as a post-spending “hangover.”
“Am I Doing Something Wrong?”
“Exposure to social media posts can trigger a feeling of inadequacy,” explains Veronica Holloway, 27, a data analyst residing in Chicago. “It raises questions about personal financial responsibility when unable to replicate the spending habits showcased online.” This feeling of inadequacy is a core component of money dysmorphia.
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Defining Money Dysmorphia
This resultant unease is increasingly recognized as “money dysmorphia” within financial planning circles. Analogous to body dysmorphia, where individuals perceive a distorted image of their physical appearance, money dysmorphia describes a skewed perception of one’s own financial health. It manifests as a perplexing disconnect between objective financial status and subjective financial perception.
The Split-Screen Reality
“Individuals experiencing money dysmorphia may believe they lack sufficient funds despite objective indicators suggesting financial stability,” clarifies Aja Evans, a financial therapist who counsels clients struggling with this condition. “Online narratives easily fuel these distorted perceptions, leading to feelings of financial inadequacy when comparing oneself to curated online portrayals of spring break trips and affluent lifestyles.”
Consequences of Dysmorphic Financial Perceptions
These distorted perceptions, detached from financial realities, can manifest in contrasting behaviors. For some, it results in excessive financial restraint and unnecessary frugality. Conversely, others may overspend, often facilitated by “buy now, pay later” services. Data from Experian indicates that the average Gen Z consumer carries approximately $3,500 in credit card debt. A 2024 Qualtrics study revealed that nearly one-third of Americans report experiencing money dysmorphia, with 43 percent of Gen Z individuals affected.
Roots of Financial Anxiety
For individuals like Ms. Holloway, this ingrained financial uncertainty traces back to childhood experiences, specifically her parents’ job losses during the 2008 financial crisis. Growing up in a household below the poverty line instilled a deep-seated anxiety around spending, even on essential items. The memory of feeling physically ill after purchasing $130 sneakers for her high school team highlights the enduring impact of early financial insecurity.
Even with current financial stability and income exceeding her living expenses, Ms. Holloway finds it challenging to overcome these ingrained anxieties. Social media further exacerbates these feelings by constantly showcasing curated highlights of friends’ discretionary spending on dining and personal grooming.
Historical Parallels: Luxury in Times of Uncertainty
The “hemline theory” suggests a correlation between economic prosperity and fashion trends; shorter hemlines are associated with economic booms and celebratory moods. A related theory observed by economists and sociologists posits that during economic downturns, demand for small luxuries may increase. The “Lipstick Effect,” observed during the 2008 financial crisis, exemplified this, with consumers increasing spending on inexpensive cosmetics, possibly as a way to improve their mood amidst broader economic anxieties. Similarly, the economically turbulent early 1980s saw a rise in flamboyant and excessive fashion, as exemplified by popular imagery of the era featuring opulent displays of wealth.
Echoes of Past Recessions
“This display of preppy affluence occurred during the most severe economic recession since the 1930s,” notes Douglas Rossinow, a historian and author specializing in the Reagan era. These historical patterns suggest a cyclical relationship between economic anxiety and consumer behavior, further complicated by modern social media influences.
Modern Financial Reality and the “Boom Boom” Resurgence
This inclination towards “lipstick effect” spending in times of uncertainty is now compounded by a uniquely complex financial landscape for young people. For years, subsidized services from venture capital-backed companies created a distorted sense of financial ease for millennials. Social media platforms primarily showcase aspirational lifestyles – exclusive restaurant reservations and luxurious travel experiences. Now, amidst heightened economic uncertainty, this curated online aesthetic clashes even more starkly with financial realities.
Shifting Aesthetic Trends
“The more understated, minimalist aesthetic of the 2010s, characterized by an effort to downplay overt displays of wealth – influenced by Silicon Valley’s casual workplace culture – has diminished in popularity,” observes trend forecaster Sean Monahan.
Mr. Monahan, who coined the term “boom boom aesthetic” in December, has identified a recent surge in online posts featuring conspicuous consumption – caviar, tailored suits, exclusive parties, and 1980s-inspired opulence. “People feel explicitly engaged in status-driven competition,” he suggests. “The social hierarchy is currently in flux.”
Navigating Personal Spending Amid Economic Headlines
Dessie DiMino, a tech professional, is acutely aware of friends’ social media posts showcasing expensive ski trips and music festivals. She actively reinforces her commitment to saving, particularly while following news headlines about economic instability and potential tariffs impacting everyday expenses, including essential grocery items.
“I don’t want to completely abstain from enjoying life, but I recognize the need for restraint and choosing to stay home on certain days,” Ms. DiMino, 27, acknowledges, highlighting the conscious effort to balance spending with saving goals.
The Psychological Impact of Perpetual Crisis
For Ms. Walsh, the marketing professional, embracing financial prudence presents unique challenges for her generation, given the pervasive feeling of living under constant crises – pandemics, climate change, and political instability. She expresses to her mother the difficulty in prioritizing saving when faced with an overwhelming sense of impending global crises.
“Main Character Energy” and Spending Habits
“There’s a tendency towards more frivolous spending driven by a ‘world is ending anyway’ attitude,” Ms. Walsh explains. “If the future is uncertain, what exactly are we saving for?”
In February, she indulged in hosting a Valentine’s Day party in her apartment, spending significantly on themed decorations and attire. “Was it a financially sound decision?” she questions. “Probably not.”
Financial Guidance in Uncertain Times
Financial planners, especially those working with younger clients, are addressing these evolving financial anxieties. Some clients are responding to economic uncertainty by increasing discretionary spending as a coping mechanism, while others are becoming overly frugal, even with necessary expenses.
Coping Mechanisms: Overspending and Underspending
“I have clients who are excessively cutting back on essential expenses like groceries, despite their overall financial security,” notes Matt Lundquist, a therapist in Manhattan. “Conversely, others swing in the opposite direction, indulging in luxury purchases as a form of immediate gratification – justifying high-end purchases with a ‘why not?’ mentality.”
Social Media’s Impact on Class Perception
Kara Pérez, founder of a financial literacy organization for women, observes these uncertainties reshaping her clients’ perceptions of their own financial standing. The constant exposure to affluence on social media can distort their self-assessment of financial comfort. Ms. Pérez notes that some clients who objectively belong to the middle class no longer perceive themselves as such.
Distorted Self-Perception and Online Comparison
“Many individuals internalize a sentiment of financial inadequacy based on comparisons to extreme wealth,” Ms. Pérez explains. “They equate not being ultra-wealthy as being broke.”
Ms. Pérez also observes this sentiment in online comments on her social media content. On TikTok, where she provides personal finance advice, she encounters responses reflecting a sense of financial fatalism, with users questioning the point of saving in the current climate and rationalizing immediate, extravagant spending. This reinforces the pervasive influence of money dysmorphia in shaping financial attitudes and behaviors.