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Is ‘Money Dysmorphia’ Destroying Your Finances?
Money dysmorphia affects people across the wealth spectrum. blackCAT via Getty Images
High budget. Slow shopping. Women’s Mathematics. These days, there are countless fun terms to describe trends and phenomena in the realm of personal finance.
One of the most insidious realities that impact people’s financial health also has a name: monetary dysmorphia.
To help avoid negative impacts, HuffPost asked experts to analyze this phenomenon and share their advice for dealing with it.
What is ‘money dysmorphia’?
“Money dysmorphia occurs when you have a distorted view of your finances,” said Danielle Desir Corbett, personal finance expert and host of the podcast “The Thought Card”. “You see your financial situation very differently from your reality. Money dysmorphia can be caused by a variety of reasons, including past financial trauma, social pressures, economic crisis, or it can be deeply rooted in childhood upbringing.”
A recent survey on Credit Karma found that 29% of Americans suffer from money dysmorphia.
“Money dysmorphia is a play on keeping up with the Joneses, except the inability to ‘keep up’ is causing some people to experience feelings of inadequacy,” said Courtney Alev, consumer financial advocate at Credit Karma.
Survey data reveals that the problem is particularly prevalent in younger generations, as 43% of Gen Z members and 41% of millennials reported suffering from financial dysmorphia, compared to 25% of Gen X members and 14% of those aged 59 or over.
“Although the term is new, the feelings are not,” he said. Dasha Kennedy, creator of The Broke Black Girl and financial wellness board member at National Debt Relief. “Many people have felt financially insecure for a long time without having a specific name for it. Now, by giving it a name, it becomes easier to understand and deal with these feelings.”
People have long worried about money and felt like they didn’t have enough – even when they did. The problem appears to have gotten worse, however, in the online era.
Elizabeth AyoolaPersonal finance expert and writer for NerdWallet told HuffPost she believes people’s distorted view of their finances is “often shaped by comparisons to others they see on social media or by absorbing economic news that creates concern.”
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“When people have financial dysmorphia, they likely look at their finances more subjectively than objectively,” she added.
What are the signs of money dysmorphia?
“Financial dysmorphia can often make people believe they are worse off or better off financially than they really are,” Ayoola said. “This can manifest as excessive saving because you feel like you are behind compared to your peers. Likewise, it can feel like overspending because you feel like you are financially secure, when that is not the case.”
If you have financial dysmorphia, you may feel strong emotions about your finances when you see friends reaching financial milestones, she added. Feelings like sadness, anxiety, stress, frustration, unworthiness or overconfidence can lead to behaviors that harm your financial health – like overspending on vacation.
“People can end up living lifestyles they can’t afford,” Ayoola explained. “On the contrary, people who are financially secure may not be living full and abundant lives because they believe they don’t have enough, even if their financial reality may say otherwise. Ultimately, money dysmorphia can prevent people from reaching their financial goals or enjoying their achievements.”
Feelings such as sadness, anxiety, stress, frustration, unworthiness or overconfidence can lead to behaviors that harm your financial health. d3sign via Getty Images
By saving excessively, people with money dysmorphia may miss opportunities to invest and truly increase their wealth.
“Some people may be afraid to spend money, even on things they really need,” Kennedy said. “Others may constantly worry about their finances, regardless of their actual situation. They may feel anxious or guilty when making purchases, including necessary ones.”
She noted that common signs of money dysmorphia include obsessively checking bank balances, avoiding financial discussions, comparing with others, having a distorted perception of wealth, fear of financial ruin, being overly critical of your financial decisions, and stressing about future finances.
Especially for younger generations, there is also the temptation to link their feelings about their financial situation to what they see and present on social media, even if that is not reality. Many avoid resolving or seeking help with their debts, which promotes a cycle of financial instability.
“The impact goes beyond money,” Kennedy noted. “This can harm relationships and affect overall well-being. People can also end up depriving themselves of basic needs and joys, which can be harmful to their physical and mental health.”
How can you deal with money dysmorphia?
“Some ways to overcome money dysmorphia are to take an honest look at your finances, set clear goals, make a plan, and most importantly, keep your eyes on your own paper,” Alev said. “If your goal is to increase your savings, start by auditing your finances to see where you can save room in your budget. From there, you can schedule automatic payments each paycheck to help hold you accountable and gradually build up your savings.”
Set realistic financial goals and find helpful resources for personal finance education. Consider seeking professional guidance from a financial planner or therapist, or simply reaching out to your support system as you pursue your goals.
“Connect with an accountability buddy who you can debate, vent to, and cheer you on,” Desir-Corbett said. “Notice your daily thoughts about money. Identify and avoid triggers and distractions. Stop following social media accounts that trigger financial insecurities. Spend time listening to personal finance podcasts or reading books to fill in any knowledge gaps, especially in vulnerable areas.”
Another helpful approach for those suffering from financial dysmorphia is to try to evaluate their personal finances with an objective lens before making judgments about how they are doing.
“This means analyzing your income and expenses to see if your cash flow is positive or negative,” Ayoola said. “Another strategy is to focus on measuring your achievements based on your progress toward financial milestones rather than that of your peers. While comparison can be healthy in some cases, everyone is on a different financial journey, so sometimes it can do more harm than good.”
As you seek a healthier relationship with money, Kennedy advised practicing self-compassion
“Understand that it’s okay to spend on necessities and things that bring you joy,” she said. “Financial caution is good, but not when it harms your well-being. Financial caution should not put you in a constant state of inaction. You have to recognize when financial worries become excessive. Finding a balance is essential.”