Distorted Fortune: Understanding Money Dysmorphia
“Money dysmorphia” is a nagging insecurity about one’s finances, even when one is on solid footing. It is most prevalent among Gen Z and millennials.” Says Melanie Lambrick of the The New York Times.
Flashy cars. Expensive handbags. Island vacations. With all the fancy stuff people show off on social media, it can be easy to feel like you're always short on cash or falling behind your peers, even if you can afford some luxuries. There's a term for this, it’s called "money dysmorphia."
Money dysmorphia is a way to describe how people can feel insecure about their finances, even when they’re doing okay. It's similar to "body dysmorphic disorder," where someone obsesses over a physical flaw. Money dysmorphia, although not an official diagnosis, refers to someone who worries too much about their financial situation. This worry can lead to bad financial decisions like overspending, binge spending or making risky investments to try to “catch up”.
It's like trying to "keep up with the Joneses,". When people feel their wealth doesn’t measure up, they might spend money on things that make them happy for a short time but leave them without savings for the future. Some people go to the mall and shop to make themselves feel good. For others it might be going out to eat at an expensive restaurant. Some charge up expensive lavish vacations or buy a new car. Just like drug habits, money dysmorphia causes people to spend more and more on bigger and bigger things to get the “feel good” feeling.
A recent survey by Intuit Credit Karma found that 29% of American adults have experienced money dysmorphia. Younger people, especially, are affected. Forty-three percent of Gen Z (those in their late 20s or younger) and 41% of Millennials (those in their late 30s to early 40s) reported feeling this way. In comparison, only 25% of Gen X (those in their mid-40s to 50s) and only 14% of boomers, people 59 and older say they did.
Real financial worries like a tough job market, student loans, and high costs for housing and childcare make it hard for younger Americans to meet the financial goals set by previous generations. The luxurious lifestyles shown online often make people feel worse about their own situations.
In a 2023 survey by Edelman Financial Engines, a third of people said they spent more than they could afford on things like vacations or luxury items to keep up with others online. For those who spent more than three hours a day on social media, this number jumped to over half.
The increase in financial advice and content on the internet and social media can also make it hard for people to feel confident about their money choices. It's easy to find people online bragging about how much they make or how quickly they earned a lot of money. But, that doesn’t mean that it applies to your life.
If you are struggling with whether or not your financial plan is on track, we are here to give you a second opinion. Whether you are Gen X, Gen Z, Millenial, baby boomer, getting ready to retire or in your golden years of retirement, we can offer sound guidance from our decades of experience helping clients to walk through their financial lives. We have navigated market crashes, recessions, bull markets, wars and other market changing events. We are well equipped to guide you to a successful financial future.
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