Imagine this: You’ve just received a promotion at work, complete with a healthy salary bump. Your savings account is growing steadily, and you’re meeting all your financial obligations without breaking a sweat. Yet, as you scroll through your social media feed, a nagging feeling of financial inadequacy creeps in. Despite all evidence to the contrary, you can’t shake the belief that you’re falling behind financially. If this scenario sounds familiar, you might be experiencing money dysmorphia.
Too Long; Didn’t Read
- Money dysmorphia is a psychological phenomenon where an individual’s perception of their financial situation is distorted, despite objectively being in a good or improving financial state.
- While money dysmorphia has likely been around forever (in varying degrees), it has become exacerbated now that social media is in our daily lives.
- Money dysmorphia can present itself as overspending to keep up with the lives we see on social media or, the opposite,frugal behavior from those who feel like they are not well-off financially, but in reality are doing great.
Understanding Money Dysmorphia
What is Money Dysmorphia?
Money dysmorphia is a psychological phenomenon where an individual’s perception of their financial situation is distorted, leading to irrational financial insecurity. Those experiencing money dysmorphia focus intensely on perceived financial shortcomings, often despite evidence of financial stability.
While not an official clinical diagnosis, money dysmorphia is increasingly recognized in discussions about financial wellness. It represents a disconnect between one’s actual financial status and their perception of it, often leading to anxiety, stress, and poor financial decision-making.
Business owners especially have been comparing themselves to the highlight reels of other business owners and feel that they are “behind”. If you would like an objective analysis of your situation, schedule a free consultation with us.
Symptoms of Money Dysmorphia
Money dysmorphia can manifest itself in various ways:
- Persistent feelings of financial inadequacy despite objective evidence of financial stability
- Constant comparison of one’s financial situation to others, often leading to feelings of inferiority
- Overspending on luxury items or experiences to keep up with perceived social expectations
- Extreme frugality or hoarding of money due to irrational fears of financial ruin
- Difficulty enjoying financial successes or milestones due to persistent worry about the future
It’s important to note that money dysmorphia differs from general financial anxiety. While financial anxiety often stems from real financial challenges or uncertainties, money dysmorphia involves a distorted perception that persists even when one’s financial situation is objectively stable or improving.
Causes and Triggers of Money Dysmorphia
The Social Media Effect
It’s no surprise that social media plays a significant role in shaping our perceptions of financial success. Platforms like Instagram, Facebook, and TikTok constantly bombard us with images of luxury lifestyles, exotic vacations, and high-end purchases. This curated display of wealth can lead to unrealistic financial comparisons and fuel feelings of inadequacy.
Whether it’s celebrities or people selling dropshipping courses, constant exposure to these idealized (and in the case of most online “passive income” gurus, completely made up) lifestyles can skew our perception of what constitutes financial success, leading to money dysmorphia.
Generational Impact
Money dysmorphia appears to be particularly prevalent among younger generations, especially Gen Z and millennials. Several factors contribute to this:
Student Loan Debt: The burden of significant student loan debt can create a sense of financial lag right out of the gate for many young adults.
Housing Costs: Skyrocketing housing prices in many areas make homeownership seem like an unattainable goal, fueling feelings of financial inadequacy.
Comparison Culture: Growing up with social media, younger generations are more susceptible to constant financial comparisons with peers and influencers.
Economic Factors
Broader economic issues can exacerbate money dysmorphia:
Job Market Uncertainties: A cooling job market or fears of automation can increase feelings of financial insecurity.
Rising Costs: Inflation and increasing costs of living can make it feel like one is constantly falling behind financially.
Generational Comparisons: Comparisons to previous generations’ financial milestones (e.g., homeownership at a younger age) can fuel feelings of inadequacy.
These economic factors create a backdrop of financial uncertainty that can amplify the symptoms of money dysmorphia, even for those who are objectively financially stable.
The Impact of Money Dysmorphia
Financial Missteps
Money dysmorphia can lead to a range of poor financial decisions such as:
Overspending: In an attempt to keep up with perceived financial norms or expectations, individuals might overspend on luxury items or experiences they can’t afford.
Risky Investments: The pressure to “catch up” financially might lead to investing in high-risk ventures such as Bitcoin, “passive income side hustles”, NFTs, etc without proper consideration.
Neglecting Long-term Financial Planning: Persistent feelings of financial inadequacy can paradoxically lead to avoiding important financial planning tasks out of anxiety or shame.
Psychological Toll
The impact of money dysmorphia extends beyond financial decisions.
Chronic Stress and Anxiety: Constant worry about one’s financial status can lead to ongoing stress and anxiety.
Low Self-esteem: Feelings of financial inadequacy can negatively impact overall self-worth and confidence.
Social Isolation: Shame or embarrassment about perceived financial shortcomings might lead to avoiding social situations or relationships.
Distorted Reality
Perhaps the most significant impact of money dysmorphia is the creation of a distorted financial reality. This distortion can lead to:
Inability to Appreciate Financial Achievements: Even significant financial milestones might feel inadequate or unimportant.
Perpetual Dissatisfaction: No matter how much one’s financial situation improves, it never feels “enough.”
Missed Opportunities: The focus on perceived shortcomings might blind individuals to real financial opportunities or successes.
How to Identify and Overcome Money Dysmorphia
Self-Assessment
To determine if you might be experiencing money dysmorphia, consider the following questions:
- Do you frequently feel financially behind, even when you’re meeting your financial goals?
- Do you obsessively compare your financial situation to others (particularly on social media)?
- Do you feel guilty or anxious about spending money, even on necessities?
- Do you find it difficult to feel satisfied with your financial achievements?
- Do you make financial decisions based on how you think others perceive your financial status?
If you answered yes to several of these questions, you might be experiencing some degree of money dysmorphia.
How to Overcome Money Dysmorphia
Focus on Personal Financial Goals: Set realistic financial goals based on your individual circumstances and values, not societal expectations.
Practice Gratitude: Regularly acknowledge and appreciate your financial achievements, no matter how small.
Limit Social Media Exposure: Consider a “financial detox” by reducing time spent on social media platforms that trigger financial comparisons.
Education and Awareness: Improve your financial literacy to gain a more realistic understanding of personal finance and economic factors.
Mindful Spending: Before making purchases, especially large ones, reflect on whether they align with your values and genuine needs rather than perceived expectations. Loud budgeting can be a good method to help your friends and family keep you accountable.
Regular Financial Check-ins: Schedule time to review your financial situation objectively, focusing on facts rather than feelings.
Seeking Professional Help
If money dysmorphia is significantly impacting your life, consider seeking professional help:
Financial Therapists: These professionals can help address the psychological aspects of your relationship with money.
Financial Planners: A certified financial planner can provide objective analysis of your financial situation and help create realistic goals and strategies.
Mental Health Professionals: If money dysmorphia is part of broader anxiety or self-esteem issues, a therapist or counselor can provide valuable support.
Final Thoughts
Money dysmorphia is a growing concern in our hyper-connected, comparison-driven world. By understanding its symptoms, causes, and impacts, we can take steps to develop a healthier, more realistic relationship with our finances. True financial well-being isn’t about keeping up with others or achieving an arbitrary standard of wealth. It’s about aligning your financial decisions with your personal values and goals.
The next time you feel the urge to compare your financial situation to others, pause and remind yourself of your own unique financial path and achievements. Your financial health is about your personal progress, not how you measure up to others’ highlight reels.
