Fake It Til You Make It: Millenials Most Likely to Exaggerate Their Finances to Appear Wealthy

Recent surveys show that the millennial generation in America is the most likely to lie about and exaggerate their finances – and finance experts have some advice. 

Flaunting Their Finances

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High inflation and increased cost of living are affecting Americans across the wealth spectrum, but statistics show that one group is still feeling the pressure to flaunt their finances: millennials.

Millennial Insecurity

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According to a new Wells Fargo survey, millennials are the most likely Americans to exaggerate their wealth, or even lie about their financial status to appear more successful.

Wells Fargo Statistics

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The survey claimed that 34% of affluent millennials were likely to engage in this behavior, compared to just 20% of Gen X and 4% of baby boomers who participated.

Affluent Participants

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Participants in the survey were identified as ‘affluent,’ meaning they possessed anywhere between $250,000 and $1 million in investable assets. 

Feeling the Societal Pressure

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Despite their objective wealth and increasing inflation putting a strain on most Americans, many millennials still feel the pressure to flaunt their finances and material possessions to appear even wealthier than they are.

Credit Card Debt and Expensive Tastes

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Wells Fargo shared that 41% of affluent millennials surveyed relied on credit cards and loans to fund aspects of their lifestyle, and 29% purchased items they could not afford to appear wealthier to others. 

Society vs Reality

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51% of these millennials also reported that people around them believe they are wealthier than they truly are.

But these efforts seem to have backfired, as despite being asset-wealthy, 40% also have more debt than they would like.

Disproportionate Problems

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Wells Fargo’s managing director of advice and planning, Emily Irwin, explained that millennials want to project an image of material success despite being disproportionately affected by inflation, student loan debt, and the rising cost of living. 

A Positive Reflection

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“They want to have a reflection of, ‘We’re working hard, and therefore we’re successful, and we can still do everything that we want to do.’”

“A Real Silent Journey”

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But despite these ostentatious displays, Irwin said two-thirds of people surveyed were hesitant to talk about the concrete realities of money and their own financial status.

“It seems to be a real silent journey that individuals are on,” she said.

Silence Encourages Assumptions

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This reluctance to discuss money matters is part of what encourages people to make assumptions about how much money their peers have, according to Irwin.

Display for Social Media

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How people present themselves, particularly on social media, will influence how other people perceive their financial situation.

“There’s this tension between looks and appearances and taking on debt,” Irwin explained.

Advice From an Expert

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Financial expert Brad Klontz has shared some insight into why people exaggerate their finances, as well as how they can improve their wealth.

Klontz is a financial planner and a financial psychology expert. 

Childhood Causes

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According to Klontz, most people’s financial behavior is rooted in how they were raised.

He believes that people who want to project the image of wealth are more likely to come from a poor background. 

Not Wealthy Behaviour

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He shared that these people are also more likely to have less wealth, and their actions and self-image often contradict how truly wealthy people behave.

Designer Brands and Instagram

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In particular, people who buy excessive amounts of designer brand items and openly share their wealth on social media are less likely to be wealthy, as high-wealth individuals tend toward frugality. 

“It’s Not Representative”

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“It’s just not representative of how most people become wealthy and how most wealthy people spend their money,” he said. 

Spend Less, Save More

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Instead, he advised millennials (and both younger and older Americans) that the best way to accumulate wealth is to forego ostentatious displays and focus on not spending money.

What to Consider

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“The only way to grow net worth is to not spend your money,” he said.

Everyone should be considering how much cash flow they have, how much they are contributing to retirement accounts, and whether they have an emergency fund before spending on high-ticket items.

“Is Splurging Appropriate?”

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“Those are the kinds of things that you want to be able to identify as you put on your oxygen mask first,” Emily Irwin agreed.

“Only after that are we really able to think about, ‘Hey, is splurging appropriate, given the overall financial picture?’”

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The post Fake It Til You Make It: Millenials Most Likely to Exaggerate Their Finances to Appear Wealthy first appeared on From Frugal to Free.

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The content of this article is for informational purposes only and does not constitute or replace professional financial advice.

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