Money dysmorphia: Thin dough, thick slices?

The Star

4 hours ago

HANI Mustafa is a hardworking manager at a logistics company in Klang.
At just 27, she earns a respectable income nearing five figures; a level of success her peers admire. A devoted daughter to her retired parents, Hani never hesitates to fulfil their needs and wants.
But when it comes to herself, Hani is extremely cautious. She worries that even occasional spending could erode her savings, despite having tens of thousands set aside.
'I don't buy those expensive coffees. Too expensive. Shop-ping? Only if it is necessary. I don't think I have a lot to spend. I once bought a watch which cost me about RM500. I felt guilty after that. I feel better whenever I save more money.'
Hani may be among a growing number of youth grappling with money dysmorphia – a non-clinical term describing a distorted perception of one's financial situation. It can manifest as feeling financially insecure despite having substantial savings, or conversely, believing one has more money than one actually does.
This distortion can lead to anxiety, guilt, underspending, overspending, poor financial decisions, overworking, and even a reduced quality of life.
A survey published in the United States by financial company Credit Karma last year revealed that nearly half of young adults report signs of money dysmorphia. Specifically, 43% of Gen Z and 41% of millennials admitted to struggling with financial comparisons and feeling 'behind' in life.
In Malaysia, no formal studies have surfaced yet, but the trend appears to resonate locally.
Taylor's University Mental Health and Well-being Impact Lab deputy director Dr Hiran Shanake Perera explains that money dysmorphia is rooted in perception.
'Money dysmorphia is an interesting term. I have come across various descriptions of it and it's easy to misunderstand it as some kind of mental disorder caused by worrying about money. But that's not what it is.
'The term refers to a distorted perception of one's financial status. And I want to stress the word 'distorted' here. Being worried about retirement or saving for emergencies – that's not money dysmorphia. That's just being responsible.
'Money dysmorphia is when you feel like you should already be a millionaire at 18, even though your income is typical for someone just starting out in life. Your perception of financial 'normal' becomes skewed.'
However, the stress and anxiety it creates can escalate into burnout, self-esteem issues, or relationship conflicts.
'If left unmanaged, it can even lead to spending more on psychological support to undo damage that could've been avoided with proper planning,' Perera says.
It is all too common
Financial consultant Suraidah Ya'cob says she has met several people exhibiting traits of money dysmorphia in her line of work. Typically between 20 and 40 years old, they come from both urban and rural settings, with varying degrees of worry.
'They are worried about spending their money, that their savings will be depleted even if they spent a bit more on normal things like food, despite having good jobs and more than enough money – even after paying bills – to last throughout the month.'
Suraidah, who previously worked for a major bank, notes that some clients are unsure where to place their money and believe even investments will lead to loss.
'Some of them, for example, prefer to rent because they believe buying a house will leave them broke. This is despite the common knowledge that properties like houses tend to appreciate rather than depreciate.
'For some who earn a steady monthly salary, they think they won't have enough to pay for the house later on, despite the likelihood of salary increments.'
She adds that some, particularly aged 20 to 35, won't even indulge in a slightly pricier meal once a month.
'If their friends plan a more expensive lunch outing, some will opt out, thinking it'll heavily affect their savings – again, despite having more than enough in their bank accounts.'
Yet she empathises.
'To be fair, I was one of those who had that mentality. I used to work for a bank for years, earning a monthly income. That defined what 'stability' meant to me, until I quit and became a financial consultant.
'I was constantly worried during the first few months, wondering if I had enough to spend, despite having enough. It was only after some time in the field that I realised I was earning more than 10 times what I used to make with a fixed income.'
The root of the problem
Referring to the Credit Karma survey, Perera notes that Gen Z includes those born between 1997 and 2012, with the oldest around 28 and the youngest still in their early teens.
'A large portion of this generation still lives with their parents and is financially dependent. Many are in tertiary education, juggling part-time or freelance work. Only a small segment might have a stable career. And even then, likely with fewer than five years in the workforce.
'Of course, there are exceptions, such as entrepreneurial or tech-savvy individuals with early support. But these are not the norm.'
He points to patterns among Gen Z, both in the US and Malaysia: career instability, frequent job-hopping and resistance to traditional workplace structures.
'Sometimes it's framed as a desire for better work-life balance or meaningful work, but it also reflects a lack of long-term financial security or commitment. So it's no surprise many feel insecure, even if they aren't technically struggling.'
He says in Malaysia, cultural expectations add pressure, usually seen through a strong sense of familial obligation such as supporting parents financially, giving allowances, or contributing to household expenses, even at the start of one's career.
'Combine that with social pressure to 'look successful', such as owning a car, buying a house, having the latest phone, or throwing extravagant weddings, even those doing well on paper may feel like they're falling behind.'
Suraidah adds that many still don't realise that money can be grown, and simply stashing it away won't unlock its potential.
'I believe it's how we were taught about money. Your parents always say 'save, don't invest'. While saving is good, your money won't grow that way.
'When you get your first job, the advice is still the same; save and save. It creates a fear of spending a bit more for something worthwhile, like investments.'
'Many people don't understand the difference between saving and investing. Even if you're earning more than you think, your perception of financial stability remains skewed. You'll always be afraid even when you have enough.'
Making cents: Suraidah says that money can be grown and simply stashing it away won't unlock its potential. — IZZRAFIQ ALIAS/The Star
New world, new problems
Online influencers showcasing wealth only make things worse, Perera says.
'Gen Z spends a significant portion of their day on platforms like TikTok, Instagram, and Snapchat. These platforms are filled with curated displays of luxury designed to impress.
'When you're constantly exposed to this, it's natural to compare yourself – even if it's not real. Over time, this warps your perception of financial 'normal' and fuels inadequacy.'
He also notes that inflation, though officially low in Malaysia, doesn't reflect real-world challenges.
'While the official rate hovers around 1.4%, the cost of living – food, rent, transport, utilities – continues rising in urban areas.
'When incomes remain stagnant, these small pressures add up. Add taxes and fees, and it erodes disposable income. So concern over money is understandable.'
But the danger lies in the psychological disconnect between income and perceived financial wellbeing.
'That's where money dysmorphia creeps in. Constant exposure to rising expectations and stagnant earnings leads to fear, even when the situation is objectively manageable.'
Moolah matters
Suraidah says fear of spending often comes from not having a plan or financial goals.
'People are afraid to spend because they don't know what to do with their money. They don't have plans. No goals.
'But if you have a goal – say, buying a house – you'll make it work. You won't fear spending anymore.'
She draws from personal experience: Suraidah grew up in a squatter house and upon landing a job after graduation, made plans to buy a house for her parents.
'Despite my financial fears, I decided to buy a house for them. I took on two jobs – one at a bank, one doing consultancy. Alhamdulillah, I saved enough to make it happen.'
Buying that house changed her outlook.
'I realised spending money isn't always a loss. I bought a house for my parents. That's something to be proud of, not something to fear. So having a goal is key to a healthy financial mindset.'
Perera agrees that financial literacy is the foundation of overcoming money dysmorphia.
'Without basic knowledge about income, spending, saving, and planning, it's easy to fall into distorted thinking.'
One strategy he recommends is to map out one's desired lifestyle for the next 10 to 15 years – home, family, travel – and calculate what it would cost.
'Then work backwards to assess your current position. This helps anchor your goals in planning rather than emotion or comparison.
'But keep it realistic. Don't set goals based on what influencers show. Avoid the FOMO [fear of missing out] mindset. Everyone's financial journey is different.'