A new, concerning trend in society has emerged online and across social media: money dysmorphia. It's the latest version of the comparison trap and aims to describe a distorted view of one's financial situation and how one is doing financially.
Money dysmorphia is a psychological condition where individuals have distorted perceptions of their financial status, often leading to unhealthy behaviors and attitudes toward money.
Similar to body dysmorphia, where individuals perceive flaws in their physical appearance that may not be objectively present, money dysmorphia distorts one's perception of their financial situation.
People with this condition may feel they never have enough money, regardless of their actual financial standing, or they may obsessively hoard money due to fear of scarcity. Money dysmorphia symptoms can include anxiety, depression, and financial instability.
Keep reading or watch the video below to learn more about money dysmorphia.
Money dysmorphia can affect anyone regardless of their socioeconomic status. It can manifest in individuals who come from low-income backgrounds as well as those who are affluent.
According to a recent study by Credit Karma, nearly one-third of Americans experience money dysmorphia. The study defined money dysmorphia as "having a distorted view of one's finances that could lead them to make poor decisions."
The effect on younger generations is unmistakable, with approximately 43% of Gen Z and 41% of millennials experiencing money dysmorphia compared to 25% of Gen X and only 14% of survey participants aged 59 and older. Similarly, about 45% of millennials and Gen Z are obsessed with the idea of being rich.
The result? There is so much stress among those experiencing money dysmorphia. These younger generations feel like they don't and will never have enough money. They feel conflicted between their salary expectations and spending power and the reality of how much money most people actually earn. This is the modern equivalent of "Keeping Up with the Joneses."
Young adults navigating financial independence for the first time may be particularly vulnerable to developing money dysmorphia.
This condition is leading young people to overspend, take on more debt, hoard their income, and be less generous with their giving.
Many millennials and Gen Z'ers grapple with the sense that acquiring wealth is necessary for their future comfort and happiness. However, the real issue is that they have more "Joneses" than ever to keep up with due to social media.
Sadly, when it comes to social media, it is common to compare your reality of Mondays to what other people post about their Saturdays or best days. This distortion between perception and reality can prevent you from taking the steps and making the right decisions on the way to achieving your financial goals.
As the saying goes, comparison is the thief of joy.
There are a few ways to address money dysmorphia, including:
Awareness is the first step in addressing money dysmorphia. Recognizing distorted thought patterns and behaviors related to money can help individuals seek support and intervention.
Consulting with a therapist or financial counselor specializing in behavioral finance can provide valuable insights and strategies for managing money dysmorphia. Cognitive-behavioral therapy (CBT) and other evidence-based interventions can help individuals reframe their thoughts and develop healthier attitudes towards money.
Take a look at what you are bringing in and what is going out (your expenses) each month to understand your cash flow. Think about the things that really matter to you, like saving for a home, paying down debt, traveling to see family or friends, putting money away for retirement, etc., and consider what you need to do to achieve what is essential.
Establishing realistic financial goals and creating a budget can provide a sense of control and direction. Breaking down long-term goals into smaller, achievable steps can help individuals build confidence and resilience.
Create a plan to help you achieve your goals. Make it easy on yourself by automating your savings and paying your bills so they come out of your account before you can spend that money.
Limit your time on social media or take a break altogether. Make decisions that make you happy instead of focusing on keeping up with others.
Cultivating mindfulness can help individuals become more aware of their financial behaviors and emotions. Mindfulness practices such as meditation, journaling, and mindful spending can promote greater clarity and intentionality in financial decision-making.
It's vital for individuals struggling with money dysmorphia to practice self-compassion and avoid self-judgment. Money management is a skill that can be learned and improved over time. Celebrating progress, no matter how small, and treating oneself with kindness can foster a positive relationship with money.
Money dysmorphia doesn't discriminate and can affect those with and without means. However, it takes a heavier toll on those who fall into the younger generations, including Gen Z and millennials. The rise of social media has taken the concept of "keeping up with the Joneses" to a new unhealthy level.
Remember, focusing on what is in your control and what is important to you is essential, especially when external factors make you feel overwhelmed or confused. All the pressure to keep up with the "digital Joneses" is just noise and will not help you achieve your goals.
Having a financial plan is one way to stay focused on what success is for you. Our team of financial professionals specializes in comprehensive financial planning for physicians, dentists, and professionals with complex financial situations.
Reach out to schedule a complimentary discovery call today!
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Shane Tenny is the managing partner of Spaugh Dameron Tenny. Along with hosting the Prosperous Doc® podcast, Shane has a true passion for behavioral finance, helping clients and audiences understand how to develop successful strategies based on their unique temperaments. An accomplished and highly engaging speaker, Shane is regularly interviewed for television and podcasts, is actively involved in the Financial Planning Association®, and contributes to industry advisory boards.
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