Earlier this year, a survey from Credit Karma made quite the splash: Approximately 45% of Gen Z and millennials are obsessed with the idea of being rich, and more than 40% of these demographics experience something called “money dysmorphia.” Which begs the question: What is money dysmorphia?
In short, the concept entails having a distorted view of your finances.
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If you log into TikTok these days, you’ll see there’s no shortage of videos covering the topic. Joyce Marter, LCPC, financial therapist and author of “The Financial Mindset Fix: A Mental Fitness Program for an Abundant Life, says money dysmorphia has become a common struggle, especially for Gen Zs and Millennials, and now it’s being driven largely by social media.
As Dasha Kennedy, founder of the Broke Black Girl and a National Debt Relief financial wellness board member, puts it, money dysmorphia is a powerful reflection of how the pressures of social media and the constant need for validation can distort our relationship with money.
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“The blurred lines between what’s real and what’s not often push many young people to chase after an unattainable image of financial success,” she says. “This psychological state can warp your view of what financial well-being actually looks like, which leads to anxiety and dissatisfaction, often making you feel financially insecure and unstable, even when you are doing well.”
Ahead, learn more about “money dysmorphia” and how to keep your financial distortions in check.
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What is money dysmorphia?
Are you always fretting over your bank account balance when you’ve never missed a rent check? Have you found yourself breaking out in a cold sweat after treating yourself to a nice meal when you’ve got plenty of savings? You may have money dysphoria — and be anywhere from mildly to wildly out of touch with the realities of your personal finances.
“Money dysmorphia is a psychological condition in which a person does not see their financial situation accurately,” explains Joyce Marter, LCPC, financial therapist and author of “The Financial Mindset Fix: A Mental Fitness Program for an Abundant Life.”
“Similar to body dysmorphia, there is a distorted perception of how one sees oneself as compared to what other people see or what is reality.” (Note: Unlike body dysmorphia which is recognized by the The American Psychiatric Association as a mental health condition, “money dysmorphia” is not an actual diagnosis or clinically recognized condition.)
As Kennedy elaborates, money dysmorphia can cause a person to see their relationship with money through a filtered lens or to excessively worry about their finances, leading to anxiety, stress, and dissatisfaction about money, even if someone is financially stable. “It can even lead to feelings of shame for people who are in debt, despite millions of Americans finding themselves in the same situation,” says Kennedy, noting that this can have dire consequences, as a recent survey by National Debt Relief showed that 69% of Americans withdraw from things they love due to long-term exposure to a negative stimulus like constant stress, anxiety and shame.
While Kennedy says social media isn’t to blame entirely for these irrational fears about money, it plays a major role in this by constantly showing curated, almost perfect, images of luxury, abundance and overnight success. “This results in many people feeling like they have fallen short despite the hard work and effort they are putting in, or feeling isolated because of the stigma unfairly associated with common financial situations like debt,” she says.
How does money dysmorphia affect us?
Money dysmorphia affects everybody differently, and to varying degrees of intensity.
“Money dysmorphia can trigger or exacerbate mental health conditions such as anxiety, depression, eating disordered behaviors, substance misuse and even suicidal thoughts and feelings,” says Marter, adding that for Gen Zs and Millennials, it can create feelings of hopelessness and disempowerment about one’s finances.
Marter ticks off the following examples of scenarios she’s seen in her therapy practice over the years:
- A 35-year-old multimillionaire having panic attacks, obsessive thoughts and miserly behaviors due to money dysmorphia and related fears that the money would run out.
- A 38-year-old business owner with massive student loans and poor cash flow, but a business valued at 7-figures who felt she was close to bankruptcy.
- Countless single women who fear homelessness despite having a strong income and good financial health.
Marter notes that there has been a significant increase in these types of cases since the start of the pandemic due to social media, global economic uncertainty and fears that AI will replace jobs.
Why do we experience money dysmorphia?
“Keeping up with the Joneses” looks a little different in the new millennium.
As Kennedy elaborates, unlike previous generations who dealt with comparison primarily within their immediate community, we’re constantly bombarded by the lifestyles of millions of people all over the world.
“Social media is always showing us what others have or seem to have, and that we need to achieve certain milestones to be considered successful,” says Kennedy.
That said, Kennedy doesn’t believe social media alone can be solely blamed for the financial challenges younger generations face. For example, Kennedy points to the fact that many millennials entered adulthood during the 2008 financial crisis, while Gen Z has faced the economic challenges brought on by the COVID-19 pandemic.
“These experiences have created a sense of uncertainty and insecurity around financial stability, making it harder for us to feel confident in our financial decisions,” she continues. “When you also layer in the financial requirements modern life throws at us from a young age, such as tuition, housing costs and job insecurity, it’s no surprise many Gen Z and Millennials have a deep, underlying economic anxiety.”
Kennedy points to another exacerbating factor that heightens the likelihood of these generations experiencing dysmorphia is the lack of accessible and realistic financial education. Plus, Marter says many in these generations are burdened with student loans and finding it very difficult to buy a home, and achieve other financial goals. “We compare our insides to other people’s outsides, especially those who we see as peers flaunting a glamorous lifestyle on social media,” Marter says.
What to do if you think you have money dysmorphia
Whatever the reason for your money dysmorphia, seek out the resources and professional guidance you need. “Help is available. See a financial therapist, meet with a financial planner and talk with others to gain perspective,” Marter says.
It’s also worth taking note that some people are more likely to be afflicted with this issue than others. “Individuals who have an underlying mental health condition, suffer from low self-esteem or who have experienced financial trauma such as poverty, unemployment or underemployment are at higher risk of experiencing money dysmorphia,” says Marter, adding that those with less support are also more likely to experience this condition due to pressures of truly feeling on their own.
To combat money dysmorphia, Kennedy similarly stresses that it is important to promote a healthier relationship with money, focusing on education and a realistic understanding of personal finance.
“Financial wellness isn’t about competing with others or achieving a certain level of wealth — it’s about feeling secure and content with your individual financial journey,” she says.
“We have a responsibility to shift the focus from comparison to empowerment to help each other build confidence in our financial decision-making and to appreciate our progress.”
This story first appeared on TODAY.com. More from TODAY:
