How ‘Money Dysmorphia’ Harms Your Finances

How Money Dysmorphia Could Be Hurting Your Finances

Experiencing money dysmorphia can distort your perception of financial health, either inflating or deflating your actual financial situation. Ayoola explains, “Money dysmorphia can make people feel they’re financially worse or better off than they really are. This often leads to extremes such as excessive saving due to perceived inadequacy or overspending from a false sense of security.”

If you have money dysmorphia, witnessing friends achieve financial milestones may trigger intense emotions such as sadness, anxiety, stress, frustration, or unwarranted confidence, potentially leading to detrimental financial behaviors like overspending on luxuries. “People may find themselves living beyond their means,” Ayoola elaborates. “Conversely, financially stable individuals may unnecessarily tighten their belts, missing out on life’s pleasures despite having sufficient resources.”

Excessive saving out of fear or anxiety restricts individuals from investing and building wealth. Kennedy states, “Some are afraid to spend, even on necessities, while others incessantly worry about their finances despite their actual financial standing. This anxiety or guilt around spending can surface even when making essential purchases.”

Recognizing the Signs of Money Dysmorphia

Common signs of money dysmorphia include obsessively checking bank balances, avoiding financial discussions, constantly comparing oneself to others, having a distorted view of personal wealth, fearing financial disaster, critically scrutinizing every financial decision, and undue stress over future finances.

Dealing with Money Dysmorphia

Younger generations might particularly conflate their financial self-worth with social media portrayals, leading to unrealistic comparisons and a continuous cycle of financial insecurity. Many avoid acknowledging or addressing their debt, exacerbating financial instability. As Kennedy notes, “The impact goes beyond finances. It can strain personal relationships and overall well-being. Deprivation of life’s necessities and joys negatively affects mental and physical health.”

Addressing money dysmorphia involves recognizing and challenging these distorted perceptions. Seeking financial education and counseling are significant steps towards healthier financial behavior. By understanding your true financial situation, you can set realistic goals and enjoy your financial gains rather than being overwhelmed by stress or living a deprived life.

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