This despicable phenomenon is destroying people’s finances

Budget out loud. Shop slowly. Girl calculations. These days, there are a myriad of fancy phrases to describe trends and phenomena in the realm of personal finance.

One of the insidious realities that impacts people’s financial situations also has a name: money dysmorphia.

To help limit the negative effects, Huffington Post asked experts to analyze the phenomenon and share their advice on how to deal with it.

What is “Financial Dysmorphia”?

“Money dysmorphia is a distorted view of your finances,” says Danielle DeCille Corbett, personal finance expert and host of the podcast The Thought Card. “You see your financial situation in a way that is completely different from reality. Money dysmorphia can be caused by a variety of reasons, including past financial trauma, societal pressures, and financial crises, and it can also be deeply rooted in your childhood upbringing.”

A recent Credit Karma survey found that 29% of Americans experience money dysmorphia.

“Money obsession is a play on the notion of being better than others, but not being able to ‘keep it up’ makes some people feel inferior,” said Courtney Alleb, consumer finance advocate at Credit Karma.

The data shows that the issue is particularly prevalent among younger generations, with 43% of Gen Z and 41% of millennials reporting experiencing financial dysmorphia, compared to 25% of Gen Xers and 14% of those over 59.

“The term is new, but the feelings aren’t,” says Dasha Kennedy, founder of The Broke Black Girl and member of the Financial Wellness Committee for National Debt Relief. “For a long time, many people have felt financial insecurity but didn’t have a concrete name for it. Now that there’s a name for it, it makes it easier to understand and address these feelings.”

People have long worried about money and felt like they never had enough, even when they had plenty, but in the online age, this problem seems to have gotten worse.

Elizabeth Ayoola, a personal finance expert and writer at NerdWallet, told HuffPost that she thinks people’s distorted views of their finances are often “formed by comparisons to others on social media and absorbing anxiety-inducing economic news.”

“People with money dysmorphic disorder are likely to view their financial situation subjectively rather than objectively,” she added.

What are the signs of financial dysmorphia?

“Money dysmorphia often leads people to believe that their financial situation is worse or better than it actually is,” Ayoola says. “This can manifest as over-saving because they feel they are lagging behind their peers. Similarly, it can manifest as over-spending because they feel financially secure when in fact they are not.”

If you have People with money dysmorphia may have strong feelings about their own financial situation when they see friends reaching their financial goals, she adds. Feelings of sadness, anxiety, stress, frustration, worthlessness and self-doubt can lead to behaviors that undermine financial health, like overspending on the holidays.

“People may be living a lifestyle they can’t afford,” Ayoola explains, “and conversely, people who are financially secure may not be living a full, rich life because they believe they don’t have enough, even though their actual financial situation indicates otherwise. Ultimately, discomfort with money can prevent people from reaching their financial goals or feeling a sense of accomplishment.”

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Feelings like sadness, anxiety, stress, frustration, worthlessness and self-doubt can lead to behaviors that undermine your financial wellbeing.

If you’re not attached to money, you may over-save and miss out on opportunities to invest and actually grow your wealth.

“Some people may be afraid to spend money, even on things they really need,” Kennedy says. “Others may be constantly worried about money, regardless of their actual situation. They may feel anxious or guilty when making purchases, even for essential items.”

She noted that common signs of money dysmorphia include obsessively checking one’s bank balance, avoiding discussions about money, comparing oneself to others, having a distorted perception of wealth, fear of financial ruin, excessive criticism of one’s own financial decisions, and stressing about one’s financial future.

Younger generations in particular are tempted to connect their feelings about their financial situation to what they see or see on social media, even if that’s not reality. Many avoid addressing their debt or asking for help, which contributes to a vicious cycle of financial insecurity.

“The impacts go beyond just money,” Kennedy points out. “Relationships are strained and their overall well-being is affected. They also deprive people of basic needs and pleasures, which can have a negative impact on both their mental and physical health.”

How can you do this? Dealing with money dysmorphia?

“There are several ways to overcome your aversion to money: taking an honest look at your finances, setting clear goals, making a plan, and most importantly, taking stock of your finances,” says Alev. “If your goal is to save more, start by auditing your finances to see where there is room in your budget. From there, setting up a schedule to automatically make payments from your paycheck each month will help hold you accountable and gradually increase your savings.”

Set realistic financial goals and find resources to help you with personal finance education. Consider getting professional guidance from a financial planner or therapist or relying on your support system to help you reach your goals.

“Connect with an accountability group with whom you can brainstorm, vent, and get encouragement,” says Desilu Corbett. “Monitor your daily thoughts about money. Identify and avoid triggers and distractions. Unfollow social media accounts that fuel financial anxiety. Set aside time to listen to personal finance podcasts and read books to fill in gaps in your knowledge, especially in areas of vulnerability.”

Another helpful approach for people experiencing financial incompatibility is to try and evaluate their financial situation from an objective perspective before making any judgments about their financial situation.

“That means looking at your income and expenses to determine if your cash flow is positive or negative,” Ayoola says. “Another strategy is to focus on measuring your performance based on your progress against financial milestones, rather than your peers’ progress. While comparisons are healthy in some cases, everyone is on a different financial path and sometimes this can do more harm than good.”

To build a healthier relationship with money, Kennedy advises practicing self-compassion.

“Understand that it’s okay to spend money on necessities and things that bring you joy,” she said. “Financial prudence is good, but not when it harms your happiness. Financial prudence doesn’t mean you should always do nothing. You need to recognize when you’re worrying too much about money. Finding a balance is key.”

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