Is Social Media Responsible for Perceived Financial Anxiety?

Social media advocates have their work cut out for them these days. From lawmakers insisting that China is stealing state secrets via TikTok to educators accusing popular platforms of robbing children of their self-respect, social media can’t catch a break.

Now comes news that social posts celebrating affluent lifestyles have left many consumers – especially young people – feeling economically inadequate. They call the condition “money dysmorphia,” and it is reported that around 43% of Gen Zers and 41% of Millennials are convinced they are financial failures because their lifestyles don’t match those of the online influencers they follow.

This perception is likely real for many, but blaming Instagram, Snapchat and other social channels ignores the fact that many consumers, regardless of age and income bracket, struggle to cover the costs of housing, groceries, gas and other cover essentials.

It’s not just cash-strapped younger generations who are feeling this pressure; a high percentage of older Americans and even affluent consumers say they are struggling too.

According to the latest edition of PYMNTS Intelligence’s Paycheck-to-Paycheck Report: “Why a Third of High Earners Live Paycheck to Paycheck”, 62% of US consumers live paycheck to paycheck, including more than a third of those with annual incomes above $200,000.

The report, based on insights from a January 2024 survey of 4,285 U.S. consumers, found that 53% of baby boomers and seniors now live paycheck to paycheck, while 62% of Gen X respondents do so as well. The percentages rise from there, as notable numbers of Bridge Millennials (68%), Millennials (71%), and Gen Z (67%) all report living paycheck to paycheck.

About three-quarters of low-income respondents (those earning less than $50,000 a year) and roughly two-thirds of middle-income consumers (those earning between $50,000 and $100,000 annually) say they live paycheck to paycheck .

But even higher incomes don’t seem to protect some consumers from financial pressure. Forty-eight percent of high-income earners (those who earn more than $100,000 annually) say they live paycheck to paycheck, and within that percentage there is a 36% subset of consumers who earn more than $200,000 each year and counting always living on a salary. to pay slip.

As the chart below shows, the reasons why consumers have trouble balancing their accounts vary. For low- and middle-income consumers, insufficient income is the cause of many of their financial worries. The reasons why high-income consumers report being in financial trouble include non-essential expenses, spending on others, and events that deplete their savings.

One consistent factor that all groups say is hindering their lifestyle is debt.

paycheck to paycheck lifestyle

Nearly 23% of people with the highest incomes say family expenses are the main reason they live paycheck to paycheck. About 12% say non-essential expenses are their biggest pain point (as do about 12% of middle-income consumers). These two factors, along with the fact that they appear to be tapping into their savings more than any other segment, reveal important differences in the financial stressors plaguing top earners and other income groups. These factors suggest that consumers earning more than $200,000 annually appear to have more difficulty than others with managing money effectively and staying within budgets.

Perhaps not surprisingly, “Why a Third of High Earners Live Paycheck to Paycheck” Affluent consumers spend a smaller portion of their budget on housing than their low-income counterparts. Also no surprise: low-income consumers spend less on luxury items, while high-income people spend almost a third of their budget on non-essential purchases. And while housing and grocery spending together consume 54% of low-income people’s budgets, that combination is only 38% of what those earning more than $200,000 spend.

Given the current economic uncertainties and recent inflation is risingThere is no doubt that many consumers experience money dysmorphia. But, as the recent PYMNTS Intelligence report concludes, it may be that financially stressed, high-income earners lack the “disciplined habits” needed to offset their perceived financial hardship.

Leave a Reply

Your email address will not be published. Required fields are marked *