Luxury cars. Designer handbags. Island vacations.
With the orgy of conspicuous consumption sweeping social media, it’s easy to imagine yourself poorer than you are, forced to sip a beer when you could actually order the occasional champagne.
It has a name: “financial dysmorphia.”
This term – which isn’t exactly new – is making the rounds on the internet these days and describes our often twisted relationship with money.
It is inspired by the term “body dysmorphia”, a mental disorder that causes people to obsess over a physical trait that is perceived as a defect.
Financial dysmorphia (which is not a real diagnosis) refers to irrational financial insecurity. According to financial planners, this mindset can lead to financial mistakes like overspending or making risky investments.
Inflatable Neighbor Syndrome
“It’s like the blow-up neighbor syndrome,” says Courtney Alev, a planner at Intuit Credit Karma, a personal finance consulting firm. For those who feel they’re not financially up to par, it’s tempting to “capitulate and blow their money on short-term pleasures that get in the way of building wealth.”
According to a Qualtrics survey commissioned by Intuit Credit Karma, 29% of American adults say they experience financial dysmorphia. Young people are most affected: among those under 30, it’s 43%; among those in their 30s and early 40s, it’s 41%. But beyond that age and into their late 50s, the proportion of respondents saying they experience financial dysmorphia drops to 25%, and then to just 14% among those 59 and older.
A slowing job market, student loan debt, expensive homes and the high cost of raising children are all making the financial goals of previous generations less attainable. Plus, the ostentatious lifestyles young people see online are deepening their feelings of inadequacy, says M.me Alev.
Social media again
Last year, financial planning firm Edelman Financial Engines commissioned a survey on spending and social media.
A third of respondents said they had spent beyond their means on holidays, luxury items and so on, motivated by what they had seen online. That figure was over half for respondents who said they spent more than three hours a day on social media.
The recent proliferation of online financial content — some good, some not so good — can also make people less confident in their decisions, notes Kevin Mahoney, founder of Illumint, a financial planning firm aimed at millennials.
It’s easy to find people online today bragging about “how much they make, or that they’ve made x amount of dollars in x number of days, or saying, ‘This is what you should have accomplished by the time you’re 30,'” Mahoney says.
“That doesn’t mean it applies to your life at all.”
This article was published in the New York Times.
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