Financial unease persists among numerous individuals, despite their wealth surpassing that of preceding generations.
🤘 Hey there!
You might've heard the phrase "money dysmorphia" floating around TikTok or money blogs recently. It's all about this generational thing where despite young Americans being wealthier than their counterparts in past generations, approximately 60% of them still feel anxious about their finances. Confusing, right? Our fren, Darian Woods from The Indicator, dives deep into this puzzling Gen Z predicament.
Darian explains that a 25-year-old's typical income today ranges anywhere between $42K and $50K a year. Compare that to millennials, Gen Xes, and baby boomers, who earned significantly less at the same age. Plus, young people today own more assets, yet they're still feeling financially short-changed. So what gives?
Well, apart from obvious reasons like student debt, sky-high house prices, and inequality, neuroscientist Tali Sharot from MIT and University College London thinks there are a couple other factors in play:
1️⃣ Habituation: Having great things like an interesting job or a comfortable home can eventually bring less joy as we become accustomed to these comforts. Meanwhile, Gen Z's financial stability isn't providing them the satisfaction they expect, which makes them crave more.
2️⃣ Social Media Comparison: Undeniably, Gen Z grew up with social media. Social media platforms make us compare ourselves to what looks like our peers, which can lead to considerable disappointment. Tali warns that this incessant comparison can negatively impact our overall well-being.
Now, some might think we're gaslighting you, saying that all of this emotional distress is just in Gen Z's heads. But Tali clarifies that our subjective experience truly does matter. She suggests seeking a break from social media or modifying some of our habits to see if it might help us feel a bit happier and more satisfied.
Tali also reminds us that dissatisfaction with the present can spark change, encouraging us to think deeply about our own situation and how we can make positive alterations for a better tomorrow. 🌞
Darian Woods, NPR News.
🎶 (This content may not be entirely fresh, as it is based on an NPR transcript that was created on a rush deadline. You can visit CNN Business or Money Magazine for more current insights.) 🎶
Important Factors Impacting Gen Z's Financial Satisfaction:
- Economic Uncertainty: Inflation and the cost of living have an adverse effect on the real value of Gen Z's earnings and cause anxiety about their financial stability.
- Financial Debt: High levels of student debt, coupled with limited savings, hinder Gen Z's ability to invest and meet their living expenses.
- Goal Discrepancies: Shifting values among Gen Z, such as a focus on personal time and work-life balance, often result in earning less money but facing persistent anxiety.
- Lack of Financial Education: Many Gen Z individuals feel unprepared to make sound financial decisions, which leads to anxiety about long-term financial futures.
- Social Comparison: Increased social media visibility of peers' accomplishments can amplify feelings of falling behind, further impacting their financial well-being.
- The economic uncertainty caused by inflation and the high cost of living remains a significant factor in Gen Z's anxiety about their financial stability, despite their higher earnings compared to previous generations.
- Despite owning more assets, Gen Z still feels financially short-changed due to high levels of student debt and limited savings, hindering their ability to invest and meet their living expenses.
- Shifting values among Gen Z, such as a focus on personal time and work-life balance, often lead to earning less money but facing persistent anxiety due to a lack of financial education and preparedness for making sound financial decisions.
- Increased social media visibility of peers' accomplishments can amplify feelings of falling behind among Gen Z, negatively impacting their mental health and overall well-being.
