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What Is Money Dysmorphia? And How is it Affecting Younger Generations?

Updated November 13, 2024

A man looks crazed for money in this photo illustration.

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Scrolling through social media can make you feel like you’re being bombarded with financial success stories such as, “How I became a millionaire by 25!” or “How I saved $100,000 before turning 20!” It’s human nature to compare yourself to other people. So, when you see these wildly successful accomplishments, it can seriously mess with your head and give you a warped view of your own finances. This can lead to money dysmorphia.

This psychological condition can work in both directions. You may fear you aren’t doing as well as you could be even though you actually are in a decent place financially. Or, depending on the kind of stories you hear, you may believe you are absolutely killing it when you actually need to dial back your spending. The first scenario is typically more common.

Let’s take a closer look at what money dysmorphia is, how to spot it and what to do when it affects you.

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What Is Money Dysmorphia?

Money dysmorphia is a blanket term that describes when someone experiences a distorted and irrational preoccupation with their finances. With this messed up view of your financial reality, you may start to see yourself as significantly less or more wealthy than you actually are. That can often lead to emotional distress, financial anxiety and even harmful financial behaviors like overspending or hoarding money.

How Are Younger Generations Affected By Money Dysmorphia?

Influencers on Instagram and TikTok often showcase their glamorous getaways to Ibiza or luxurious stays in Bali. It can seem like everyone online these days is swimming in cash, even when they aren’t. And when younger generations — who are spending nearly five hours per day on social media — are bombarded by these ‘highlight reels,’ it’s no wonder that they’re developing a distorted view of their financial situation.

According to a Qualtrics study conducted on behalf of Intuit Credit Karma, 43% of Gen Z and 41% of millennials said they experience money dysmorphia. This is compared to 25% of Gen X and just 14% aged 59 or above. The study also found that over 54% of respondents who experience money dysmorphia say they’re obsessed with the idea of getting rich. That’s compared to just 12% of those who do not struggle with the condition.

Gen Z and millennials’ obsession with becoming insanely rich, coupled with the distorted view of their financial reality, is causing them to make even worse money decisions. The survey found that 95% of Americans with money dysmorphia say it negatively impacts their finances. It causes them to overspend, take on more debt and hold them back from saving. So, comparison is not only the thief of joy, it could also affect your finances.

Signs You May Have Money Dysmorphia

A growing number of Gen Z and millennials suffer from some sort of financial insecurity, regardless of whether they’re doing well or not. If you’re feeling the same way, you’re probably wondering if you have money dysmorphia. Here are some key signs:

1. You lie about your finances.

If someone asks you how much you have in your savings and you purposefully exaggerate the number, you may have money dysmorphia. “If you have lied about your finances — whether you claimed to have more or less than you actually do — that’s a key indicator of money dysmorphia as there’s a disconnect between perception and reality,” Michael Liersch, Ph.D. and head of Advice & Planning for Wells Fargo, wrote in an email.

2. You constantly compare yourself to others.

Jason B. Ball, certified financial planner and chartered financial consultant, said if you’re always comparing your financial situation to what you see on social media, that’s a red flag to watch out for. “It’s easy to feel like you’re not doing enough when you see others posting about their expensive vacations or new cars. But remember, social media often shows the highlight reel, not the full story,” he said.

3. Emotional rollercoaster when it comes to money.

Another sign you may have money dysmorphia is if you often experience intense emotions about your finances. “For example, you may feel envious or anxious when you see friends’ financial achievements, or conversely, you might feel overly confident if you think you’re doing better than others. Both extremes can indicate a skewed view of your financial reality,” Ball said.

4. You set unrealistic financial goals.

There’s nothing wrong with setting goals to better your finances. However, Ball believes it can become unhealthy if you’re setting goals based on what others have instead of your needs. For example, buying a luxury car just because your neighbor has one or putting a $100,000 Birkin bag on your vision board just because you want to look like all the other “rich” people.

Questions To Ask Yourself

Still not sure if you have money dysmorphia? Here are a few questions to ask yourself to better understand your relationship with your finances:

Do you compare your financial situation to others?
Does scrolling on social media make you feel anxious about your finances?
Have you found yourself overspending to keep up with the Joneses?
Do you catch yourself frequently lying to others about your financial situation?
Do you experience fluctuations in self-esteem based on your monetary status?
Are you ignoring your financial responsibilities and goals due to feelings of inadequacy or hopelessness?

If you answered yes to most of the questions above, you may want to speak to a financial therapist. They can help you understand the root of the problem.

How Do You Overcome It?

Dealing with money dysmorphia can be tough, but you can overcome it with these strategies:

Shift your attention to your own financial situation. Everyone’s starting line is different. You may be unknowingly comparing yourself to someone who comes from a wealthy background. So, instead of focusing on others, “set realistic financial goals based on your income, expenses and future plans. And don’t forget to celebrate your progress, no matter how small,” Ball advised.
Cut back on social media. If you’re spending hours on social media platforms like TikTok and Instagram, you may want to cut down your screen time. “Try curating your feed to follow accounts that inspire and educate you rather than those that make you feel pressured. There are also apps that can help limit your social media usage,” Ball said.
Get professional advice. Money dysmorphia can cause you to have a distorted view of your financial health, leading to anxious feelings. This is why getting an outside perspective from a professional can make a big difference. “A financial advisor can help you understand your finances and provide a reality check to help you stay grounded,” Ball said.

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Jamela Adam is a personal finance writer covering topics such as savings, investing, mortgages, student loans and more. Her work has appeared in Forbes Advisor, Chime, U.S. News & World Report, RateGenius and GOBankingRates, among other publications.