Gen Z, millennials struggle with money dysmorphia

If you find yourself constantly worrying about money, obsessively checking your bank account, comparing your net worth to others,and feeling inadequate even though you’re on solid financial footing, you might have money dysmorphia.

Long story short, money dysmorphia is when you develop an unrealistic and distorted view of your finances, making you believe that your financial situation is worse than it actually is. 

According to a Credit Karma survey, around one-third of Americans experience a distorted view of their finances. However, Gen Z and millennials seem to struggle with it more than other groups. Credit Karma found that around 43% of Gen Z and 41% of millennials feel behind financially even though they actually have above-average savings. And approximately 45% of them are obsessed with the idea of becoming rich. 

Kristie Tse, psychotherapist and founder of Uncover Mental Health Counseling, believes it stems from the deep-seated beliefs about worth and the narratives we heard about money, success and failure as children. 

“In my experience with clients, cultural narratives and family dynamics profoundly influence these beliefs,” she said. “As a psychotherapist, I see how societal pressures and generational teachings about money can distort one’s financial self-image. Specifically, people from marginalized communities may internalize negative stereotypes about economic potential, which complicates their relationship with money.”

In other words, this feeling of shame or unease about having or spending money is usually rooted in some kind of unresolved emotion or perception picked up early on.

Another culprit is the endless cycle of social comparison. Today, social media platforms like TikTok and Instagram are flooded with influencers flaunting their luxury purchases, vacations to exotic locations, and six-figure savings by their mid-20s. And when Gen Z and Millennials — who spend so much of their time on these platforms — are bombarded with these highlight reels, it’s easy for them to feel inadequate and anxious about their finances. 

Do you have money dysmorphia? 

Although medical professionals don’t officially recognize money dysmorphia as a clinical diagnosis, this disconnect surrounding your finances can undermine your financial well-being, damage your self-esteem, and disrupt your sense of control. 

According to Chelsea Williams, chief financial architect at Core Solutions Group and the creator of Money Mastery, some signs and behaviors that indicate you might be experiencing money dysmorphia are avoidance of things such as financial planning, looking at your bank statements, or even discussions of money. Another sign is fearing spending or feeling poor even when you're not.

“Feeling compelled to earn more, even if you're already financially independent, is also a sign of money dysmorphia,” she said. “Negative shopping habits such as buying expensive items to feel adequate or feeling ashamed after spending are also signs.”

Ways to overcome it 

Money dysmorphia isn’t a condition that sticks with you forever. If you think you might suffer from money dysmorphia, Tse believes the first step to overcoming it is to reframe your old narratives about money.

“It's essential to identify and challenge negative narratives about money you've internalized, often shaped by cultural or family dynamics. As a psychotherapist, I focus on helping my clients unravel these emotions and beliefs linked to their financial self-image,” she said. 

One way to start unraveling these beliefs is by journaling. Williams recommends jotting down the fears about money that are holding you back. Then, write down positive affirmations that challenge your old fear and give you permission to think of a new thought that will serve you.

“That way, when your negative thoughts and fears come up, as they surely will, you've got a positive thought ready to take over instead of continuing the old line of thinking,” she said.  

It’s entirely possible to rewire your brain to create a healthier money mindset. “Your thoughts are neurological pathways laid out in your brain. The more you think a thought, the stronger that neurological pathway becomes,” Williams explained. Journaling builds awareness of these thoughts as they arise and reinforces your ability to choose new, healthier patterns over the old ones.

Building a healthier relationship with money

When you see someone your age with a $500,000 savings account or a million-dollar home, it’s easy to start questioning if you’re falling behind and even develop symptoms of money dysmorphia.

But remember, social media is just a highlight reel. Most people only post their successes and leave out the debt, sacrifices, and hard work that might go on behind the scenes. Plus, you’re on your own path and financial journey. Comparing yourself to others who might have had family support or different life circumstances isn’t fair to you — or realistic. 

That said, if you’re still feeling anxious about money and can’t help comparing your financial situation to others, consider seeking support from a psychologist or financial therapist. They can help you address the root causes of these feelings and build a healthier relationship with money.