Money Dysmorphia: What Is It, the Signs and What To Do About It

This was originally posted on Planner Bee.

In a world where money is often used as a measure of success and status, it’s no surprise that many individuals develop complex relationships with their finances. While it’s natural to have concerns and occasional stress about money matters, for some, these worries can spiral into a more serious condition known as money dysmorphia.

Similar to body dysmorphia, where individuals have distorted perceptions of their physical appearance, money dysmorphia involves skewed views and behaviours related to finances.

In this article, we’ll delve into what money dysmorphia is, how to identify its signs, and strategies for achieving financial wellness.

What is money dysmorphia?

Money dysmorphia is a psychological condition characterised by distorted beliefs and behaviours surrounding finances. Those affected by money dysmorphia often experience intense anxiety, dissatisfaction, and preoccupation with their financial situation.

This condition can manifest in various ways, from compulsive spending or hoarding to an obsessive fear of losing money. Individuals affected by money dysmorphia may find it challenging to establish practical financial objectives, frequently compare themselves to others, and develop a negative self-perception based on their financial status, whether affluent or lacking.

According to Channel News Asia, a study conducted by personal financial firm Credit Karma found that in the United States, 29 percent of Americans are affected by money dysmorphia. The survey specifically highlights that 43 percent of Gen Z individuals and 41 percent of millennials report experiencing money dysmorphia.

How to identify money dysmorphia

Recognising the signs of money dysmorphia is crucial for addressing the issue and seeking appropriate support. Here are some common indicators to watch for:

1. Constant worry about finances: Do you find yourself experiencing persistent anxiety or stress related to money matters, regardless of your actual financial situation? If you discover that you’re frequently checking your bank accounts or budgeting apps due to concerns about overspending, it could indicate experiencing money-related stress. While it’s beneficial to stay informed about your financial status, excessive monitoring may actually add to feelings of stress and anxiety.
2. Comparison to others: Those with money dysmorphia frequently engage in comparing their financial status to that of others. This comparison can lead to feelings of inadequacy, envy, or a sense of superiority based on perceived financial success or failure.
3. Obsessive spending or hoarding: Money dysmorphia may manifest in compulsive behaviours such as excessive spending on unnecessary items or hoarding money and possessions beyond practical needs. These behaviours are often driven by underlying emotional factors rather than rational financial decisions.
4. Difficulty setting financial goals: Individuals struggling with money dysmorphia may find it challenging to establish and work towards realistic financial goals. They may have difficulty prioritising their financial needs and may feel overwhelmed by the prospect of planning for the future.
5. Avoidance of financial matters: Money-related stress may prompt individuals to evade financial planning or addressing financial matters altogether. This behaviour may involve neglecting bills, disregarding bank statements, or steering clear of conversations about finances. While this avoidance might offer temporary relief from stress, it can ultimately result in heightened anxiety and compounded problems in the long run.
6. Negative self-image tied to wealth: Money dysmorphia often involves tying one’s self-worth to their financial status. Individuals may feel ashamed or unworthy if they perceive themselves as lacking in wealth or financial success, leading to low self-esteem and negative self-talk.
7. Denial of financial problems: Despite evidence of financial difficulties, individuals with money dysmorphia may deny or minimise their financial issues. This denial can prevent them from seeking help or taking necessary steps to improve their situation.
8. Extreme fear of losing money: Those with money dysmorphia may experience intense fear or anxiety at the thought of losing money or facing financial setbacks. This fear can manifest in overly cautious behaviour, reluctance to take financial risks, or avoidance of investment opportunities.
9. Unhealthy financial habits: Money dysmorphia often coexists with unhealthy financial habits such as overspending, compulsive gambling, or engaging in risky financial behaviours. These habits provide temporary relief from emotional distress but can lead to long-term financial consequences.
10. Impact on relationships and well-being: Feeling ashamed of your financial circumstances might cause you to withdraw socially, making it challenging to engage in activities that require spending money. The isolation stemming from money-related stress can exacerbate feelings of anxiety.

Understanding the root causes

Money dysmorphia can stem from various underlying factors, including past experiences, cultural influences, and societal pressures. Childhood upbringing, socioeconomic status, and media portrayal of wealth can all contribute to the development of distorted beliefs and attitudes towards money. Additionally, traumatic financial events or ongoing financial instability may exacerbate symptoms of money dysmorphia.

Strategies for tackling money dysmorphia

While overcoming money dysmorphia may seem daunting, there are effective strategies for regaining control and achieving financial wellness:

1. Practise mindfulness and self-compassion: Cultivate awareness of your thoughts and emotions surrounding money, and approach yourself with kindness and understanding.
2. Set realistic goals and budgets: Establish achievable financial objectives and create a realistic budget to guide your spending and savings habits. Here’s a guide on how to set financial goals for your future without losing yourself. When it comes to goal setting, it’s also important to track your progress along the way. To easily keep tabs of your expenses and progress, try out the Planner Bee app.
3. Challenge distorted beliefs: Question negative or irrational beliefs about money and replace them with more balanced perspectives. Explore resources that offer alternative viewpoints on money and wealth. This could include reading books, attending financial literacy workshops, or seeking guidance from financial advisors who can provide insights beyond your existing beliefs.
4. Seek professional help if needed: Consider consulting a financial therapist, counsellor, or mental health professional with expertise in money-related issues. If money is an issue, why not try these 5 free mental health apps?
5. Surround yourself with supportive peers: Seek out individuals who have a healthy attitude towards money and provide encouragement and guidance.
6. Practise patience: Understand that overcoming money dysmorphia is a process that takes time and effort, and be patient with yourself along the way.

By recognising the signs of money dysmorphia and taking proactive steps to address underlying issues, you can break free from destructive financial patterns and cultivate a healthier relationship with money.

Remember, your financial well-being is not defined by your bank account balance but by your ability to manage money in a way that aligns with your values and goals.

Read more: Create a Personal Budget You Can Actually Stick To