Financial security is something we all want, and money undoubtedly plays a huge role in our overall well-being. However, with inflation and rising living costs, financial security is far more than just what your bank balance shows. Sometimes, financial pressure can distort how you perceive your financial reality.
What Is Money Dysmorphia?
This is a psychological condition in which a person develops an unrealistic understanding of their financial situation. Either they believe they have more money than they actually do, or they assume they’re doing far worse financially than they actually are. These intrusive thoughts can make a person feel extremely insecure and stressed, even if he/she has a stable income and good savings. You could say this distorted mindset is not about the bank balance; rather, it’s about where their money stands in relation to their own social norms and expectations.
Just like body dysmorphia gives a distorted image of how you see yourself, money dysmorphia warps your financial reality, either making you feel worse than you actually are or deluded about financial warning signs that are staring straight at your face. This is due to a disconnect between reality and perception, where the lines blur so much that a person ends up taking irrational actions, such as compulsive spending, fear-driven saving, or constantly feeling burdened by financial failure.
How Does Money Dysmorphia Happen?
Here’s the thing: we all have a unique relationship with money, shaped by factors such as our culture, upbringing, and generational attitudes. These factors can play a significant role in shaping our money mindset and financial wellness.
When it comes to body dysmorphia, people fixate on apparent physical flaws that are not noticeable to others. Money dysmorphia, on the other hand, makes people focus on imagined financial inadequacies. Money dysmorphia has become increasingly common today, largely due to constant comparisons of our lives with those of online influencers and peers who appear more financially stable and successful. When your self-worth is attached to an unrealistic standard, then it’s natural for reality to be distorted due to self-doubt and anxiety.
This is especially why money dysmorphia is rising drastically, especially among the younger generation who are deceived by the glitzy lifestyle they see online. According to a recent study, more than 40% of Gen-Z and Millennials struggle with money dysmorphia and are constantly battling feelings of financial inadequacy.
Likewise, if you grew up in a household with financial instability, you may develop a chronic fear of money. Poor financial education is another reason people fall into money dysmorphia, as not knowing about budgeting, investing, and saving can lead to a lack of confidence in money matters, further fuelling anxiety.
Financial Difficulty Vs Money Dysmorphia
There is a huge difference between real financial hardship and money dysmorphia. Naturally, when you carry a lot of debt or lose a job, you’re going to feel stressed and anxious. However, when you experience stress and feelings of inadequacy despite having a comfortable salary, healthy savings, and no debt, it is considered money dysmorphia.
In addition to creating needless emotional stress, money dysmorphia can trigger negative and unhealthy financial behavior such as under-spending, excessive saving, burnout from working overtime, or fear of investing for the future.
Signs Of Money Dysmorphia
- Feeling broke all the time.
- Obsessing over your financial statements.
- Staying away from social activities due to feelings of inadequacy.
- Anxiety over spending for even absolute necessities like groceries and healthcare.
- Constant comparisons with other people who are seemingly doing better financially.
- Physical symptoms that manifest in the form of panic attacks, headaches, insomnia, and stress.
How To Overcome Money Dysmorphia
- Build financial awareness by taking control of your finances. Calculate your net worth and track your income, debts, expenses, and savings. Then set realistic financial goals that align with your personal goals, not the unrealistic lifestyle often portrayed on social media.
- Build an emergency fund to help you during unexpected expenses. You can also automate your savings to reduce the pressure of making financial decisions every day.
- Understand your triggers–if you start getting negative feelings when you browse through social media, then limit your exposure. Take time each day to practice gratitude to shift your focus to positive thoughts.
- Take control of your financial reality and understand that bad days are completely normal. Don’t be too hard on yourself or compare your life to others, as that can fuel pressure to keep up financially with those around you.
How Money Dysmorphia Can Affect Your Mental Health
Since money dysmorphia shapes how you perceive and value money, it can significantly impair your ability to manage your finances, often leading to counterproductive decisions. People who experience money dysmorphia fall into two extreme categories: either they under-invest due to anxiety of money running out or over-save for fear of future financial instability. In short, money dysmorphia makes your unreal anxiety about your situation into a real economic hardship.
When money is always a cause of concern for you, it can take a serious toll on your mental health, affecting your relationship with other people, leading to irritability, chronic stress, and burnout. This can eventually lead to a vicious cycle that is harder to break.
From avoiding social events to fearing salary negotiations at work, money dysmorphia can cripple your growth potential and break your confidence. When you fail to address it at an early stage, it can affect several aspects of your life, including your relationships, mental health, and confidence.
Final Thoughts
Money dysmorphia doesn’t happen out of the blue; rather, it’s a result of deep social, cultural, and psychological influences that can distort one’s idea of financial stability. If you feel poor despite having a stable income, it may be a clear sign of money dysmorphia. This can leave you feeling unnecessary fear and guilt, even when making simple financial decisions.
Comparing your life with another social media influencer’s highlight reel can create feelings of inadequacy, and this comparison can distort your perception of life, forcing you to chase unrealistic goals in life. This manifests in the way you handle your finances, leading to money dysmorphia. Experts say that money dysmorphia can even end up becoming a self-fulfilling prophecy because your distorted perception of your financial situation can put you on the road towards financial destruction in the long run.
