Why fear of poverty is growing among young people (and why it’s a concern)

Ever lie awake at 3 a.m. stressing about your bank account, even if you just got paid?

If that feeling of dread about money feels less like a temporary worry and more like a constant, low-grade hum of anxiety in the background of your life, you might be experiencing a modern version of ‘Peniaphobia’.

What’s that? It’s a term derived from the Greek word ‘penia’, meaning poverty, and it describes an intense, often irrational fear of being or becoming broke. While it can be a full-blown clinical phobia, it’s also become the perfect word for a widespread cultural anxiety that’s sinking its teeth into Gen Z and Millennials.

This isn’t just standard money stress; it’s a full-blown cultural phenomenon gripping Gen Z and Millennials, fueled by a perfect storm of real economic pressure and perceived social expectations, and it’s quietly reshaping their lives. Let’s break down what’s going on, why it’s happening, and why it’s a much bigger deal than you might think.

The numbers don’t lie: Financial anxiety is the new normal

Feeling stressed about money has become a generational rite of passage, but the scale of it is staggering. This isn’t just a case of “kids these days” complaining. The data paints a clear picture of a generation gap in financial well-being, and it’s more like a chasm.

A revealing report from Credit One Bank found that a whopping 59% of Gen Z and 51% of Millennials feel stressed or anxious about their finances. Compare that to just 29% of Baby Boomers. Think about that. Young people today are roughly twice as likely to be financially stressed as their parents’ or grandparents’ generation. This isn’t a once-in-a-while worry, either. A study by Northwestern Mutual found that 39% of Gen Z and 38% of Millennials experience depression and anxiety about their finances on a weekly basis.

And this constant stress isn’t just in their heads; it’s making them physically sick. The same study revealed that financial worries have caused physical illness in 56% of Gen Z and 53% of Millennials. We’re talking about a level of anxiety so profound that it manifests in everything from sleep loss and headaches to more serious health issues.

This isn’t just a personal problem; it’s a public health issue in the making, where economic conditions are directly compromising a generation’s mental and physical well-being.

Why everyone feels broke (even when they’re not)

So, what’s feeding this beast? It’s a toxic cocktail of three key ingredients: a brutal cost of living, crippling debt, and a social media landscape that constantly tells you you’re failing.

The cost-of-living squeeze is real

The single biggest reason for all this stress is that life has just gotten ridiculously expensive. The high cost of living is the number one financial barrier for young people, with a Bank of America study finding that 51% of Gen Z see it as a direct obstacle to their success.

It’s the everyday stuff that’s hitting the hardest. Young adults are finding that adulthood is way more expensive than they bargained for, especially when it comes to groceries (63% find them pricier than expected), rent and utilities (47%), and even just grabbing a bite to eat (42%). Housing, in particular, has become a nightmare, with 44% of young renters aged 16 to 24 currently worried about their ability to make rent.

The student debt anchor

On top of everything costing more, a huge portion of young people are starting their financial lives deep in the red. Previous generations might have started at zero, but many Millennials and Gen Zers are starting their careers with a massive financial anchor tied around their necks: student debt.

We’re talking about a national crisis totaling $1.67 trillion in federal student loans alone, affecting over 42.3 million Americans, according to the Education Data Initiative. The average federal debt is a staggering $39,075 per borrower, a sum that can take nearly 20 years to pay off.

As Professor Lin Peng of Baruch College points out, this debt, when combined with the high cost of living, leaves “little room for financial flexibility.” It’s not just another bill; it’s an anti-asset that actively prevents wealth building for the first decade or two of a person’s career. How can you save for a down payment when you’re still thousands of dollars in the hole?

The social media pressure cooker and ‘money dysmorphia’

And then there’s the elephant in the room: your phone. Social media has created a bizarre new phenomenon called “money dysmorphia,” which is when you feel financially insecure even if your bank account says you’re doing okay.

Sound familiar? Credit Karma states that it’s incredibly common, affecting 43% of Gen Z and 41% of Millennials. Platforms like Instagram and TikTok have become “digital stages where wealth is often equated with worth,” creating a “distorted sense of what’s ‘normal’ or attainable.” It’s no surprise that over half of Gen Z and 43% of Millennials admit that social media makes them want to buy things they can’t afford.

This is the cruel irony: Gen Z is arguably the most financially literate generation ever, yet they’re also the most anxious because they are constantly bombarded with information that tells them they’re not measuring up.

Is ‘hustle culture’ helping or hurting?

In response to all this economic anxiety, a new cultural mantra has emerged: hustle. The idea is that if you just work harder, longer, and smarter—juggling a 9-to-5, a side hustle, and maybe a passion project—you can grind your way to financial security.

This isn’t some niche concept. The hashtag #sidehustle has over 12.8 billion views on TikTok, and Google searches for the term have skyrocketed. For many, it feels like the only option.

Sociologically, this culture preys on our deepest fears—the “hunger to succeed” and the “fear of failing.” It’s a coping mechanism, an attempt to seize control in a world that feels economically out of control. Taking on a side hustle isn’t just about the extra cash; it’s an act of agency, a way of feeling like you’re fighting back.

But here’s the catch. This relentless pressure to monetize every waking moment often backfires, leading to the very burnout and anxiety it was meant to solve.

How this fear is changing everything

This deep-seated fear of financial instability isn’t just an internal struggle. It’s having massive, real-world consequences, forcing an entire generation to rewrite the rulebook on what a successful life looks like.

Delaying the ‘American Dream’

The traditional milestones of adulthood—getting married, buying a home, having kids—are being put on an indefinite hold. It’s not that young people don’t want these things; it’s that they feel they can’t afford them.

Homeownership, once the cornerstone of the American Dream, now feels like a fantasy. The World Economic Forum reports that almost two-thirds of young people believe buying a home will be harder or even impossible for them.

Starting a family feels just as out of reach. Research by MassMutual found that nearly a quarter(23%) of both Gen Z and Millennials without children do not plan to become parents, primarily due to financial reasons.

Careers of stability, not passion

This financial pressure is also reshaping career ambitions. The old advice to “follow your passion” now sounds like a luxury few can afford. Instead, the top priority for Gen Z entering the workforce is stability.

A Handshake survey found that 70% of undergrads say job stability would make them more likely to apply for a job. When ranking priorities, a good salary (86%) and work-life balance (72%) crush career advancement (46%). Passion has taken a backseat to the practical need for a steady paycheck.

This creates a potential “dissatisfaction loop.” Choosing a stable but unfulfilling job might pay the bills, but psychological studies show it’s a recipe for long-term burnout and low motivation, which can feed the very cycle of anxiety they’re trying to escape.

The mental health fallout

Ultimately, the biggest consequence of Peniaphobia is the toll it takes on mental health. The link is undeniable and clinically verified. A Harvard report found that 56% of young adults said financial stress was negatively impacting their mental health.

This isn’t just feeling “sad.” A study at the University of Nottingham in the UK shows that people struggling with debt are more than twice as likely to suffer from depression. The constant worry leads to anxiety, mood swings, and chronic sleep problems.

A huge part of this is shame. Society often treats financial trouble as a personal failing rather than a systemic problem. This stigma makes people feel isolated and ashamed, causing them to withdraw from friends and family, which only makes the stress worse.

So, what can we actually do about it?

Here’s some expert-backed advice that actually helps:

First, reframe what “success” even means. Financial planner Ryan Greiser puts it perfectly: “The goal isn’t to look rich at 25—it’s to retire a decade or two before your peers.” Stop playing the social media comparison game. It’s rigged. As Gen Z financial planner Marnie Bonner advises, take a “deep breath and a step back,” and focus on your own journey, not the highlight reel of others.

Second, get practical to regain a sense of control. Financial advisor David Gibson says, “Clarity is the antidote to financial anxiety.” Use an app or a simple spreadsheet to track your money. Do it honestly, but without beating yourself up. Just knowing where your money is going is a massive first step.

Then, automate it. Set up automatic transfers from your paycheck into a savings account. It’s the easiest trick in the book, and it works.

Finally, protect your mental health as fiercely as you protect your bank account. The solution has to be both financial and psychological. All the budgeting in the world won’t cure the anxiety from money dysmorphia.

This means setting boundaries with social media. Unfollow accounts that make you feel inadequate. Talk about your money worries with a trusted friend or a professional. Breaking the silence is one of the most powerful ways to dismantle the shame and stigma that give financial anxiety its power.

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