What is money dysmorphia and how to overcome it

Business Times

2 days ago

[SINGAPORE] It takes me about three scrolls on TikTok before I see yet another influencer draped in couture, dining at the latest 'must-try hidden spot'. Switch to Instagram and my unemployed friends are somehow glamping in Bali or making gyros on a yacht in Greece.
While social media is not necessarily reality, I can't help but feel that the life I should be living seems beyond reach.
But here's the thing about money: Somehow, we never seem to have enough of it.
It doesn't matter if you're living paycheque to paycheque or earning a six-figure salary, there's always more to make and spend.
Are you actually short on cash or could you be suffering from what the internet calls money dysmorphia?
As its name suggests, this is a financial derivative of body dysmorphic disorder – a psychiatric condition wherein a person's perceived body defects become all-consuming.
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While it isn't an actual medical diagnosis (yet), money dysmorphia works the same way: Your bank balance can show one thing, but your brain tells you another.
The irony is, studies have shown that Gen Zs are earning more than previous eras and are better at saving and budgeting . Yet, we still fall behind in financial confidence and preparedness .
But for a generation that grew up amid a global pandemic and are now faced with a tough employment landscape , it's no wonder our perception of financial stability is skewed.
So it seems it's not about being bad with money, but more about how a large number of Gen Zs carry nagging insecurities about their financial standing, no matter what their bank account numbers show.
🚩 Signs of money dysmorphia
So how do you spot money dysmorphia before it morphs into something bigger?
Experts say, money dysmorphia can show up as:
Scrimping to an extreme degree that causes unnecessary stress
Hoarding your savings in low-yield savings accounts
Delaying investments out of fear
Taking excessive risks , such as high-risk investments
Splurging on items beyond one's means to meet perceived social expectations
Overworking to hit an arbitrary bank balance or standard that keeps shifting further
❓ Why this happens
Recently, a friend brought up how her social media feeds have been flooded with videos of influencers flaunting their sponsored luxury products. I started to notice this too.
Strangely, the more I saw creators sporting the same luxury items, the less 'exclusive' they felt. Subconsciously, I started to believe that I should be able to afford these items as well.
It was reminiscent of habituation, a term in psychology when someone is exposed to a situation so often that they come to normalise it.
Perhaps, our parents might be on to something about the dangers of our smartphones, for social media not only fuels comparisons, it can also rewire our financial benchmarks.
Indeed, a study by Credit Karma found that the younger generations are more obsessed with the idea of being rich and prone to comparing their finances with their peers and celebrities online.
But beyond social media, factors like one's upbringing can also shape one's relationship with money. If you grew up in a household where the phrase 'money doesn't grow on trees' was practically sung as a lullaby, that scarcity mindset doesn't disappear once you start earning your keep.
Add in rising costs of living and economic uncertainties to online advice that teeters between saving more and enjoying life now, it is understandable for our relationship with money to turn rocky.
🛣️ Planning ahead
Comparison is the thief of joy, but the real danger lies when one's skewed perception replaces truth. Insecurities about money – whether real or imagined – can become your default lens, and once that mindset takes hold, it can be hard to unlearn.
So it is important to remember that most of what we see online is often a performance – an ensemble of 'best versions' of people that may not always be representative of their actual financial situation.
Sure, taking time off social media helps. But I find that understanding my cash flows and setting financial goals early allows me to shed my insecurity surrounding money.
Among the advisers I spoke to, they all agreed that the best way to gain a better gauge of where you stand financially, is to ground yourself in objective metrics.
For those who have just begun to earn their keep, following the Monetary Authority of Singapore's Basic Financial Planning Guide may help:
Set aside at least three to six months of your expenses for emergency needs
Obtain insurance protection of
Spend at most 15 per cent of your income on insurance protection
Invest at least 10 per cent of your income for retirement and other financial goals
But of course, this is just a general rule of thumb and your financial plan should be tailored to your priorities instead of simply replicating what others have done.
Knowing exactly where your money is going and how it helps you reach your goals, creates a clear view of your financial standing and reduces money dysmorphia, Jason Lim, Head of Product Management at Prudential Singapore says.
After all, financial wellness is about achieving peace of mind, not perfection. The goal is to create a system that works quietly in the background, freeing you to focus on other aspects of your life, Sin Ting So, Chief Client Office at Endowus says.
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