Money Dysmorphia: What Is It and Does It Impact You?

You have savings, no pressing debt and make a good income. When you review your accounts and circumstances you should feel proud and comfortable, but instead you’re seized with worry. You can’t relax and enjoy your positive situation.

Or, maybe the process of earning money makes you nervous or you feel inferior because others have more than you do, so you spend in ways that put you in a dangerous financial position.

If any of these scenarios resonate, you may be experiencing money dysmorphia — an unrealistic assessment of your financial affairs that leaves you in an alarming state of anxiety.

Here’s more about what it is and how you can see your position more clearly.

What Is Money Dysmorphia?

In psychiatric terminology, dysmorphia (also known as dysphoria) is a “profound sense of dissatisfaction,” explains Dr. Kiran Dintyala a San Diego physician who specializes in stress.

Therefore, money dysmorphia means being very unhappy with regard to one’s financial situation.

“It’s rooted in the gap between one’s financial reality and their perception of their finances,” Dintyala says. He classifies money dysmorphia into the following types:

Earning obsession. “You might be quite wealthy but your perception may be that you still don’t have enough money to be happy,” Dintyala says. There is a sense of inadequacy, so you feel compelled to earn more, so you can feel secure. Objectively, though, you have reached financial independence.

Money hoarding. Your bank account is full but you’re loath to spend. For example, you may buy only the cheapest and even unhealthy products at the grocery store even though you can afford higher quality items. Vacations and entertainment are absent from your budget.

Adverse shopping. Despite financial constraints, you’re compelled to buy expensive and unaffordable items. If you don’t, you feel inadequate and unhappy. While you feel guilty about your behavior, you can’t stop spending.

“No matter what category of money dysphoria you fall into, it can be quite detrimental for your overall health and well being,” Dintyala says. “The anxiety, the worry, the guilt, and other negative feelings around your financials can wreak havoc in your life.”

In addition to the emotional effect, money dysmorphia can negatively impact your present and future finances.

For example, you may have excessive savings sitting in your bank account but are too afraid to lose any that you avoid investing, which could help it grow.

Overspending can turn into expensive consumer debt and credit troubles, while overworking can take a toll on your physical health, leading to expensive medical care.

Who Is Most at Risk for Money Dysmorphia

Studies show that emotionally driven economic concerns tend to hit younger generations especially hard.

A 2024 report conducted by the saving and investing app Acorns found that 32% of millennials and 29% of Gen Zers worry that their finances could lead them to experience homelessness. In fact, these generations are nearly three times more likely than baby boomers and older respondents to have this same worry.

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Although many younger people do face financial challenges that impact their outlook — such as low wages and inflation — when social pressures are added to the mix, money dysmorphia can result, says Jenny Flora Wells, a Los Angeles-based clinical social worker.

“Millennials and Gen Z are most at risk,” Wells says. “They are constantly consuming media and content that is telling them they need to be wealthy, successful, and well-known in order to be successful and live a happy life.”

[READ: Are You Rich? How the Wealthy Are Defined]

Traumatic events, like unexpected unemployment or a relationship breakup, can also trigger money dysmorphia.

“While I had a long history of financial anxiety, it was compounded by a divorce,” says Audrey Schoen, a licensed marriage and family therapist based in Roseville, California.

“The financial fallout left me with a lot of fear and uncertainty. At the time I was terrified that I would be forced to file for bankruptcy and it would take years to recover. For a while I felt paralyzed by the fear,” she adds.

How to Achieve a Realistic, Healthy Money Perspective

To offset money dysmorphia, work toward financial stability and take pride in the strides you are making. Yes, wealth can bring happiness, but there are no guarantees that it will.

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“When I was in college, I used to make a meager $940 per month but I was extremely happy,” Dintyala says.

“As a physician now I make much more money but I can’t necessarily say that I am happier because of it. With time I realized that happiness is a state of mind rather than something you derive from outside. There are many millionaires and celebrities who are living miserable lives,” he adds.

As for Schoen, she started working with a homeless services agency, counseling women who were receiving public assistance on how to manage the small amount of money they received every month.

“It confronted me with the reality that I was not managing my money well,” Schoen says. “I was living month-to-month and was convinced I didn’t have enough for savings or to invest in retirement. That’s when I started using a budgeting app and got really close and personal with my finances.”

If you think you may have money dysmorphia, Flora suggests the following strategies to manage it:

Write down your thoughts. “Perspective around money has roots in mindset and the way we see ourselves on an individual level,” she says. “Journaling about your mindset around money, opportunity, success and wealth and where certain beliefs came from can be incredibly helpful with gaining a deeper understanding.”

Refine your version of financial success. The outside world may be bombarding you with harmful messages about money, so turn the conversation inward. Identify what really makes you happy and come to terms with what you most desire in life.

Streamline your finances. “Our brain and body get overwhelmed with too many stimuli happening at one time,” Flora says. That can result in confusion and then anxiety, so take steps to simplify your finances. Create a reasonable budget, establish achievable goals and work toward them thoughtfully.

Remember, money dysmorphia is a negative but irrational insecurity or perception about finances. With that in mind, pay attention to your personal triggers then calibrate your response so it’s realistic.

“I try to avoid social media,” Schoen says. “The pictures people often post evoke perfect lives, but it can be hard to remember that the person with the fancy car may not have anything saved for retirement.”

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