Money Dysmorphia: How to Trade Uncertainty with Financial Confidence

In a world where wealth is often equated with success and happiness and social media distorts reality, our perception of money can become distorted. While many are familiar with body dysmorphia—a condition where individuals perceive flaws in their appearance that are not evident to others – fewer are aware of its financial counterpart: money dysmorphia. And yet, many of us are afflicted by it.

money dysmorphia

What is Money Dysmorphia?

Money dysmorphia, also known as financial dysmorphia or wealth dysmorphia, is a psychological condition characterized by an unhealthy and distorted perception of one’s financial situation. Similar to body dysmorphia, individuals with money dysmorphia may perceive themselves as either having significantly less or significantly more wealth than they actually possess.

There is a disconnect between financial reality and perception.

And, this distorted perception can lead to detrimental financial behaviors and emotional distress.

Almost Half of Young Adults Report Money Dysmorphia

New research from Credit Karma has found that money dysmorphia is prevalent in younger generations. Roughly 43% of Gen Z and 41% of millennials struggle with comparisons to others and feel behind financially.

And yes, many young people are behind financially, the feelings they have about how far behind are worse than the reality.

According to the study, many of the people who say that they feel behind also report that they are financially stable. There is a distortion between their perception and the reality of their situation.

Money Dysmorphia Impacts Everyone to Some Extent, Regardless of Age or Wealth

Money dysmorphia can affect individuals across all ages and socioeconomic backgrounds. It doesn’t discriminate based on age, wealth, or income level. The Credit Karma research found that 29% of all Americans have money dysmorphia with 25% of Gen X and 14% of respondents above age 59 experiencing perception problems related to money.

However, we probably all have blind spots related to how we think about money, it may just manifest itself in different ways.

The Wealthy

Even individuals with considerable wealth can experience money dysmorphia. They may feel constantly anxious about losing their wealth, perceive themselves as financially insecure, or engage in excessive hoarding behaviors.

It is very common for people with significant retirement savings to be highly fearful of spending their nest egg. This anxiety could be considered a form of money dysphoria.

Some of the most popular articles on the NewRetirement web site address these types of concerns. Check out:

The Middle Class

In some ways, money dysphoria is a more scientific way of expressing concept of “keeping up with the Jones’s.” People in the middle-income bracket may compare themselves to those who seem to have more, leading to feelings of inadequacy and financial insecurity.

The reality is that it is almost impossible to really know the financial situation of your peers. Appearances can be very deceiving and it is best to focus on making good financial decisions for yourself and your family.

The Economically Disadvantaged

Those who struggle financially may develop money dysmorphia by idealizing wealth and believing it to be the solution to all their problems. This can lead to unrealistic financial decisions, such as taking on high-interest loans or engaging in risky investments.

Reasons for the Rise in Money Dysmorphia

The study suggests that the rise in money dysmorphia could be attributed to people’s obsession with wealth at a time when getting ahead feels increasingly out of reach.

Whereas research from the CFPB on financial wellness suggests that financial well being is a relatively simple formula. It is achieved not through getting rich but by:

  • Having control over day to day and month to month finances
  • Having the capacity to absorb a financial shock
  • Being on track to meet reasonable financial goals
  • Having the financial freedom to make choices that allow you to enjoy life

How to Address Money Dysmorphia

Recognizing and addressing money dysmorphia is crucial for improving financial well-being and overall mental health. Here are some steps individuals can take:


Start by reflecting on your attitudes and beliefs about money. Ask yourself whether your perceptions align with reality or if they are influenced by societal pressures or personal insecurities.

Here are a couple of articles to help you assess your financial beliefs:

Take Control

Money dysmorphia is the disconnect between reality and feelings. When you take control over your finances, then it is easier to accept the reality (and take action to do better if necessary).

The NewRetirement Planner puts you in control of your money and builds financial confidence. You can:

  • Get organized
  • Set goals
  • Assess your financial strengths and weaknesses
  • Make better (and more informed) financial decisions
  • Increase your financial know-how
  • Monitor your progress and stay in touch with your financial situation

Practice Gratitude

It may seem new-agey, but being grateful is actually a scientifically proven panacea to many emotional woes, including money dysmorphia.

When you cultivate a sense of gratitude for what you have, rather than focusing on what you lack you are embracing abundance and inviting positivity into your life . Take time to appreciate your material goods as well as the non-material aspects of your life, such as relationships, experiences, and personal accomplishments.

Set Realistic Goals

Set achievable financial goals based on your individual circumstances and values. Avoid comparing yourself to others, as this can perpetuate feelings of inadequacy and dissatisfaction.

Do you really want a yacht, designer purse, etc…? Focus on setting goals that express your true priorities in life.

Limit Exposure to Triggers

If money dysmorphia is a real problem you may want to be more mindful of media and advertising that promote unrealistic standards of wealth and success. Limiting exposure to these triggers can help reduce feelings of inadequacy and dissatisfaction.


Money dysmorphia is a complex psychological condition that can have profound effects on an individual’s financial well-being and overall quality of life. By recognizing the signs of money dysmorphia and taking proactive steps to address it, you can regain control over you finances and cultivate a healthier relationship with money.

Remember, true wealth lies not in material possessions, but in a sense of contentment and fulfillment derived from living in alignment with your values and priorities.

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