Warped Wealth: Money Dysmorphia Explained
Written and accurate as at: Mar 14, 2024 Current Stats & Facts
Today's economic climate is characterised by rising inflation and continued uncertainty, causing many people to experience a lack of financial confidence. This unease has led to the heightened prevalence of a lesser-known phenomenon: money dysmorphia. Also referred to as money disorder, money dysmorphia is a psychological condition that causes maladaptive thought patterns around finances, possessions, and wealth. The adverse effects of money disorders can be seen in multiple areas of a person's life, including interpersonal relationships, workplace performance and rational decision-making skills, eventually leading to a gradual loss of long-term financial goals. Other money disorders you may be familiar with include gambling addictions, hoarding issues, money hypervigilance, financial infidelity, compulsive spending and workaholism.
Financial position or life-span context?
Interestingly, money disorders do not necessarily occur due to limited finances. Studies have shown that monetary attitudes and factors such as personal income levels are not always linked, leading experts to suggest that money disorders may stem from a combination of biological and inherent characteristics and cultural contexts. From a psychological perspective, these disorders may be more apparent in those with anxiety, low self-worth or rigid styles of thinking.
Inflation as a risk factor
Recent inflation levels have affected daily lifestyle habits due to their simultaneous impact on necessary and discretionary expenditures. Not only are budgets being tightened, but widespread financial unease is rising. For those with money dysmorphia, financial health can be either undervalued or overvalued during these challenging periods, depending on the manifestation of symptoms. Either way, these symptoms can lead to excessive frugality or, contrastingly, impulsive and unsustainable spending. Overall, the essence of the problem is a misalignment between perception and reality, exacerbated by ongoing economic volatility.
The impact of Social Media
Social media adds a layer of complexity to money dysmorphia due to misleading portrayals of wealth and success. This polished reality may skew perceptions of what is financially attainable, causing users to pursue unrealistic financial goals without considering their current economic conditions.
Addressing Money Dysmorphia
- Financial literacy: Education gives people the skills to make informed financial decisions through education areas such as budgeting, investing, risk management and financial planning. It may also help rationalise maladaptive thought patterns by dismantling misconceptions about financial practices and principles that may lead to dysmorphia.
- Perspective shifting may include limiting exposure to unrealistic financial standards (e.g., on social media platforms) and disengaging with comparative financial behaviours. Reducing emphasis on material wealth as a marker of happiness may also lessen the symptoms of money dysmorphia.
- Take a break from social media and seek help if needed: As previously mentioned, financial disorders may be triggered by the unrealistic standards presented on social media, and therefore, taking regular breaks from these platforms may be beneficial. If the symptoms of financial dysmorphia are beginning to impact daily life, seeking help is encouraged as practitioners such as financial therapists can assist with improving quality of life and well-being markers.
Money dysmorphia, driven by ongoing economic challenges and the idealised representation of wealth, is a growing concern. Addressing these issues may require enhancing one's financial literacy, challenging societal perceptions of success, and adjusting one's engagement with social media. In doing so, individuals can revise their financial perceptions to align with reality, leading to healthier financial decisions and greater resilience.