Money Dysmorphia Is Warping People’s Perception of Finances

A cooling job market, record breaking inflation, child care costs that are outpacing that record-breaking inflation: There are plenty of good reasons to feel financial anxiety right now. But therapists and financial planners are warning of a new affliction disproportionately affecting young people, and leading even those on firm footing to mismanage their money.

What Is Money Dysmorphia – and Who Has It?

Body dysmorphia describes obsessive worry about perceived bodily flaws that don’t reflect objective reality. Money dysmorphia (also known as money dysphoria) causes someone to feel like they’re on the brink of financial ruin – irrespective of the actual state of their finances, which may be far better than they give themselves credit for.

Money dysphoria affects nearly 30% of Americans, according to a 2024 Intuit Credit Karma study, and young people are disproportionately impacted. Almost half of Gen Zers surveyed and nearly 60% of millennials report feeling “behind financially.” But of the respondents who experience money dysmorphia, 37% had more than $10,000 in savings, and 23% had more than $30,000 savings, well above the median savings account balance of $8,000 in the United States.

Among young people, financial status has become all-consuming: Almost half of millennials and Gen Zers consider themselves “obsessed with being rich,” according to the study. And that obsession is sometimes leading to poor financial decision-making. Of those who meet the criteria for money dysmorphia, 95% say it has negatively impacted their finances. Some aren’t saving enough, overspending on luxury goods or vacations. Others are constantly working to hit it bigger, for example, making risky decisions in the stock market. In both cases, the obsession with wealth is effectively undermining their financial future.

What Causes Money Dysmorphia?

Conspicuous consumption across social media is partly to blame. On average, Gen Zers watch 7.2 hours of video content per day, according to the Los Angeles Times. That means nearly half of all waking hours are spent watching video of people purchasing designer handbags or whimsically jetting off to Europe.

But it’s not just social media. Gen Z’s early career years, beset with mass layoffs, have eroded a long held American ideal: That big corporations are safe, stable and lucrative places to work. Meanwhile, the costs of housing, medical care, and child care have surged. And with less money saved compared to older generations, young people are being hit the hardest. No wonder that they’re feeling less hopeful about their financial futures, according to the World Economic Forum.

Is Money Dysmorphia Treatable?

Treating money dysmorphia may be fairly straightforward – but the first step is accepting that one has it. And that isn’t necessarily easy.

If you or someone you know is grappling with money dysphoria, there are practical ways to change your relationship with money:

•   Find a financial planner to get a professional take on your financial situation and goals.

•   Unfollow social media accounts that spark jealousy or encourage emotional spending.

•   Make a list of actionable financial goals – such as saving $200 a month towards a future vacation – and stick to it.

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