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You’ve got a steady job, are financially independent, paying down your debts, and able to put aside a little every month towards long-term savings. You think you’re doing pretty well financially, until you scroll social media.
Suddenly, you realize that everyone else has an investment account, a hefty head start on their 401ks, and are taking world vacations routinely. The more you scroll, the more you have the deep, sinking sensation that you are falling behind.
Or…are you? Money dysmorphia is when we perceive our financial situation to be very different from the reality. It can contribute to bad financial decisions, physical health issues, and mental health issues.
What Is Money Dysmorphia?
Money dysmorphia is a play on the mental health issue “body dysmorphia", in which people see flaws in their body that aren’t really there or are blown out of proportion.
Money dysmorphia happens when what you feel about your financial situation doesn’t match up to the truth. You might feel broke even though you’re doing quite well, or, on the flip side, you might be overspending confidently when you should start looking for ways to save.
It goes beyond not knowing what’s in your bank account or how to budget. It’s a deep-seated cognitive distortion.
Cognitive distortions are unhealthy thinking patterns. For example, “I had a cookie so I might as well stop going to the gym this month,” is an all-or-nothing cognitive distortion.
Money dysmorphia is a cognitive distortion, too. Many young people’s understanding of what financial stability looks like has been warped by social media and the uncertainty of their economic future.
Signs of Money Dysmorphia
Around a third of young people, especially Gen Z and Millennials, struggle with money dysmorphia. Signs of it include:
Overspending: People with money dysmorphia may decide that since there’s no way they’ll meet their financial goals, they might as well have fun spending. They also might think that their financial situation is better than it actually is, and mistakenly overspend.
Underspending: On the opposite side of the spectrum, many people will underspend. They think that their financial situation is dire when, in reality, it is quite healthy. Although being proactive with budgeting is always healthy, too much penny pinching will only lead to worsening mental and financial health.
Financial Stress: If you’re overwhelmingly stressed about your finances but aren’t struggling to make ends meet, you might have money dysmorphia. Being unable to pay rent and bills is a different situation, and stress in those situations probably reflects the reality. However, if you’re relatively stable and still feel the crushing stress of finances, you might have money and dysmorphia.,
Difficulty Making Financial Decisions: When you don’t see your financial situation clearly, then every decision becomes a life-or-death one. Every decision could be the one that leaves you on the street, even ones as simple as choosing a place to eat or placing a grocery order. If you agonize over every cent, you might have money dysmorphia.
Feeling Like Time Is Running Out: The primary culprit behind money dysmorphia is comparison, or the fear of missing out (FOMO). We scroll social media and see everyone else living it up with seemingly endless bank accounts, and we think that it’s too late for us to reach our wealth goals. Never mind the fact that social media rarely depicts the truth, and it’s never too late to build wealth.
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Impact of Money Dysmorphia
The impact of financial worry is large and can include:
Increased stress and anxiety
Insomnia
“Stress Saving”, or holding onto money out of sheer panic
Muscle tension, headaches, and other physical health issues
As a cognitive distortion, money dysmorphia can spawn more flawed thinking patterns. For example:
“I’ll never be wealthy, so I might as well spend what I have.”
“I could lose everything at any time, so I have to be prepared for every possible situation.”
“If I don’t save every penny, I won’t be able to afford to live.”
Budgeting, saving money, and preparing for the future are all good things. But taken to the extreme, they become toxic beliefs that seep into the rest of your life.
Money Dysmorphia Treatment
Left unaddressed, money dysmorphia can limit your opportunities in life, negatively impact your physical and mental health, and damage your financial health.
Here are some ways to treat and cope with it:
Understand your finances: Before you compare yourself to anyone else, have a firm grasp on what your finances are like. Know how much is coming in, what you’re spending it on, and how much you have left.
Write down your values: Instead of looking to other people about what your financial goals should be, look inward. What do you value? Do you value financial stability or lived experiences? Is setting up a good retirement fund the first priority, or is saving for your first home more important? These are questions only you can answer.
Deconstruct your relationship with money: Is money a resource to be guarded or something that comes and goes to you? Is it a source of stress or opportunity? Consider what your parents’ relationship with the monkey was like growing up. Often, people who experienced financial struggles growing up are more likely to have money dysmorphia as an adult.
Limit social media: It’s okay to get inspired by people you follow online, but understand that the life you see is carefully curated and edited. The truth might be completely different. You never know what someone has going on behind the camera. Limit social media while you create a healthier relationship with money.
Develop healthy financial habits: Your brain might whisper that you’re falling behind or will never meet your goals, but it’s hard to argue with facts. Set solid, healthy financial habits and start tracking your progress. When money dysmorphia tries to lie to you again, you’ll have a solid bedrock of habits to prove it wrong.
If you are still struggling, talk to a therapist. They can help you understand your relationship with money, develop healthy habits, and build the wealth you want in your life.
Online Therapy Specializing in Money Dysmorphia Support
Lifebulb offers online therapy for money dysmorphia support. We understand that for many people, their financial futures feel unsteady. Carrying the weight of money dysmorphia alone is exhausting. Talk it out with someone who understands and is trained to help.
