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In today’s social media-driven world, nearly half of young adults struggle with something called ‘money dysmorphia’—a distorted view of their financial reality. With constant exposure to the “perfect” lifestyles of others on platforms like Instagram and TikTok, many find themselves feeling financially insecure, even when they are actually doing well. In this episode, we’re diving deep into what money dysmorphia is, how it’s impacting our finances, and what we can do to break free from the comparison trap. If you’ve ever felt overwhelmed or inadequate by what you see online, this episode is for you. Let’s explore how we can regain control of our financial well-being and find peace in the midst of a world that constantly encourages comparison.

 

Nearly half of young adults have ‘money dysmorphia, survey finds.

https://www.cnbc.com/2024/03/13/nearly-half-of-young-adults-have-money-dysmorphia-survey-finds.html

 

What is Money Dysmorphia?

Money dysmorphia refers to a distorted perception of one’s financial status, where individuals feel financially insecure, even when they are actually doing well. It’s a modern day “keeping up with the Joneses.” This phenomenon is largely driven by comparison culture, particularly through social media platforms like Instagram and TikTok. As we scroll through “perfect lifestyles” online, it becomes easy to believe we’re falling short—leading to financial insecurity.

 

Who Money Dysmorphia Impacts

Nearly half of young adults, especially Gen Z and millennials, are grappling with money dysmorphia—a distorted view of their financial status. According to a recent survey, around 45% of Gen Z and 46% of millennials are obsessed with the idea of being wealthy. Despite this desire for financial success, 43% of Gen Z and 41% of millennials still feel financially insecure, often comparing themselves to others (Credit Karma).

This anxiety stems from real concerns. Many young adults feel inadequate, especially when it comes to achieving milestones like buying a home, all while inflation continues to rise. However, it’s important to recognize that greed isn’t just an issue for the wealthy—it can affect those who don’t have much, too.

 

A New “Keeping up with the Joneses”

As noted earlier, a cause for money dysmorphia is social media. It is easy to scroll social media and think that what you are seeing is a reflection of real life. But spoiler alert – it isn’t!

It often showcases idealized versions of others, leaving out the messiness and struggles. Unlike the past, when “keeping up with the Joneses” was limited to brief encounters with neighbors, coworkers, and family, today’s social media exposes us to a constant stream of “perfect” lives. On average, people spend about two hours per day on social media, absorbing these curated portrayals. When we forget that these online images don’t reflect reality, we may start feeling like we’re falling short, which can have serious consequences for our financial mindset.

If we fall into this trap of comparison, it can lead to some real life emotional and behavioral impacts.

“A tranquil heart gives life to the flesh,
    but envy makes the bones rot.” – Proverbs 14:30

 

Real-Life Implications

Emotional impact of Money Dysmorphia.

  • Chronic Anxiety About Finances: Constant worry about money, even with financial stability.
  • Distorted Self-Perception: Feeling “poor” or inadequate despite having reasonable income or savings.
  • Unrealistic Financial Goals: Setting financial goals based on others’ achievements, causing frustration and disappointment.
  • Avoidance or Denial: Avoiding financial discussions or checking bank accounts due to anxiety or self-doubt.
  • Excessive Comparison: Frequently comparing your financial situation to others, especially on social media, leading to feelings of inadequacy. As Theodore Roosevelt once said, ‘Comparison is the thief of joy.’ This is especially true when it comes to finances, as constant comparisons to others can rob us of contentment.
    • In episode 10, we talked about some contentment killers. Things that will choke out contentment in the life of the Believer. Those 4 things are Envy, Greed, Fear, and Impatience. Think about how those things connect to this topic. Envy of what others have. Greed because I want those things or that lifestyle. Fear that i won’t ever achieve that lifestyle. And impatience because I want that lifestyle now. All of these “contentment killers” can lead you into negative behaviors – theft, murder, slander, love of money, desire, materialism, and even walking away from the Lord! Why do I say this?  Remember 1 Timothy 6:6-10.  This person’s love of money was their downfall and caused their eventual destruction.

Harmful impacts and behaviors caused by Money Dysmorphia. 

  • The impact of money dysmorphia goes beyond just feelings—it can lead to harmful financial habits and behaviors. This condition can lead to detrimental financial habits, such as overspending to match perceived norms or excessive saving due to unwarranted fear of financial instability. For example, despite earning high salaries, many Americans still live paycheck to paycheck. A recent study by LendingClub found that more than half of Americans earning over $100,000 report living this way

 

The Man in the Car – The Psychology of money

The man in the car paradox, from the book The Psychology of Money. People buy these cars because they think it’s going to get them prestige and respect. But everyone looked at the car, and no one even saw the guy driving it. They just thought about what their life would be like if they were the one driving it. The only thing that it tells you is that they have a certain amount of income, or that they have a certain amount of debt. You just know how much less money they have in the bank, or how much more they have in debt. It tells you nothing about wealth. 

 

How to win the fight against Money Dysmorphia

“Never enough, when rich people do crazy things” – The Psychology of Money

The following text are excertps from The Psychology of Money. “The hardest financial skill is getting the goal post to stop moving. It gets dangerous when the taste of having “more” increases ambition faster than satisfaction. In that case, one step forward pushes the goal posts two steps ahead. You feel as if you are falling behind, and the only way to catch up is to take on more risk.

Social comparison is the problem here. Consider the rookie baseball player making $500k/year. He would be considered rich. But put him next to Mike Trout ($36m/yr), and he might look broke. Put Trout next to a successful hedge fund manager ($340m/yr) and Trout looks broke. You get the point. The goal posts keep moving. 

The point is that the ceiling of social comparison is too high, and no one will hit it. It’s a battle that you cannot win. The only way to “win” is to not fight to begin with… to accept that you might have enough.

The only way to win in a Vegas casino is to exit as soon as you enter.”

 

Stewardship Application

To break free from money dysmorphia, here are some practical steps you can take to regain control of your finances and mindset:

  • Learn contentment. Don’t seek what you don’t have, but be thankful for what you do have. Hebrews 13:5 says, “Keep your life free from love of money, and be content with what you have, for he has said, “I will never leave you nor forsake you.”
  • Limit your exposure to social media content that fosters financial comparisons.
  • Engage in open conversations with trusted individuals to gain realistic perspectives.
  • Seek guidance from financial advisors to help you understand your true financial health.
  • Connect with a community of believers who can offer support and accountability in your financial journey.
  • Prioritize time in God’s Word and prayer—putting more focus on your relationship with Him than on social media.

Remember, financial well-being isn’t about comparing ourselves to others—it’s about being faithful stewards of what God has given us. When we trust Him with our finances, we can experience true peace, free from comparison.

 

 

Next Steps

 

 

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The topics discussed in this podcast are for general information only and are not intended to provide specific investment advice or recommendations.  Investing and investment strategies involve risk including the potential loss of principal. Past performance is not a guarantee of future results.

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