Money dysmorphia and financial dysmorphia have become buzzwords on social media platforms lately. Medical professionals don’t like the terms, because ‘dysmorphia’, also called ‘dysphoria’, indicates a medical disorder. Being anxious about money and feeling inadequate financially is not a recognised medical condition.

However, used as informal slang in online chat, the concept of money dysmorphia is easy to grasp – it’s essentially the age-old tale of ‘trying to keep up with the Joneses’. By being too concerned with other people’s flashy lifestyles, you can make yourself feel inadequate – which leads to stress and sometimes to a distorted understanding of your financial reality. This can lead you into unaffordable habits just to keep up appearances.

The best way to combat this is to build a healthy relationship with earning and spending money. To do so, you need to make mindful decisions. It’s essential to understand the ‘why’ behind your spending – have advertisers, celebrity gossip sites and social media influencers sold you the myth that you need to live a certain lifestyle to be happy? Examining the psychology behind your buying decisions can help change your outlook on your finances, improve your mental health, and allow you to live more contentedly. 

What is money dysmorphia? 

It’s natural to question whether you’re earning enough to live comfortably now and still save enough for your future. Most of us ask ourselves this at some stage – making smart money choices about how to earn enough to fulfil your goals is just as important as a budget to track your income and expenses, when it comes to long-term financial planning.

So, being aware of how much you earn (and how you could earn more) isn’t a bad thing, when it’s a driving force that motivates you to reach your dreams. But a constant preoccupation with earning more becomes an issue when you’re no longer focusing on the goals that will make you happy, but on impressing others and meeting society’s expectations.

There’s nothing wrong with living lavishly if you can afford it comfortably and it makes you happy to treat yourself and others. But if you’re spending extravagantly on luxury goods, expensive restaurants, or frequent parties just to impress your social circle, your relationship with money could be toxic. If you start going into debt to maintain this type of lifestyle, you should recognise the danger and consult a financial adviser immediately for advice on tailoring your lifestyle to fit your budget.

Financial dysmorphia can also apply the other way round – what you think is ‘frugal’ could be disguising an unhealthy relationship with money. Like a classic miser counting their gold, you could fall into the trap of hoarding your money and obsessing over the total balance in your account. We all want to see our savings and investments grow, but trying to live without spending a cent unless you absolutely must can turn into an obsession that keeps you from living a happy life.

You might convince yourself that you need to work multiple jobs to accumulate more money – which could lead to burnout. You should remind yourself why you want to earn money in the first place. What is the point of having the money, if you can’t enjoy your life? 

How money dysmorphia affects mental health

The constant pressure to maintain a lifestyle that mirrors the carefully constructed ‘best lives’ that strangers showcase on social media can wreak havoc on your financial and mental health. It could trap you in a debt cycle that’s difficult to break. But obsessing about saving money or denying yourself any luxuries to grow your bank balance can also create constant mental stress. It might even lead to you spending less on essentials, like food and healthcare, which will affect your physical health.

Prolonged mental stress about money can lead to serious illnesses like anxiety and depression, putting a strain on all your personal relationships. You could also develop physical symptoms like sleepless nights, irritability, and overwhelming worry that you can’t shake off.

The dangers of loan sharks

Loan sharks prey on those desperate for financial assistance, so financial stress makes you more vulnerable. ‘Mashonisa’ charge steep interest rates, and their lack of transparency regarding loan terms and conditions makes them incredibly dangerous. They could trap you in a never-ending cycle of debt, so stick to safer options if you need a personal loan.

Improving your financial and mental health

If you feel you may be developing financial dysmorphia, it might help if you do your sums and face facts. In the Charles Dickens novel David Copperfield, published more than 170 years ago, Mr Micawber gives perhaps the best explanation of how to approach financial happiness, and one that is still true today. However, since the pounds, shillings and pence of pre-decimal British currency are needlessly complicated, we’ve taken the liberty of translating Mr Micawber’s advice into modern money: ‘Annual income R100,000, annual expenditure R99,875 – result, happiness. Annual income R100,000, annual expenditure R100,125 – result, misery.’ Even the smallest difference in how you manage your money can have a compounded effect over time that triggers emotional distress, making you feel anxious and confused.

Base your financial behaviour on a true picture of society, not what you see portrayed in the media. According to Statista, South Africans employed in the formal non-agricultural sector earned an average monthly salary of just over R26,800 in November 2023. So, when you’re scrolling through social media and envying people who flash their designer shopping sprees or brag about their million-dollar deals, remember that cold, hard statistic. They’re either an exception, or they’re not telling the whole truth – most of the people you interact with every day can’t afford that lifestyle either.

Stop comparing yourself to carefully edited content online and focus on the financial plan that suits your life goals. ‘Touch grass,’ as they say – whenever the social pressure to spend to impress starts to feel overwhelming, log off the internet and spend some time in the real world, interacting with others face-to-face. You'll probably start feeling a lot better about yourself and realise that in fact, your life and your money goals are on track.

Don’t let financial dysmorphia ruin your future – prioritise your well-being before it’s too late. If you need help making your money work for you, contact us and one of our financial experts will gladly help you to #SeeMoneyDifferently.