The Ellevest Dictionary is a series where we dig into popular money trends and parse them out — what they are, how they came to be, and what it can all mean for you. 

Sometimes it feels like, no matter how much money you make or no matter how much money you spend, you can never feel comfortable splurging on ‌pasture-raised eggs or the in-flight Wi-Fi. 

Or maybe scrolling through endless images of influencers modeling luxury goods in exotic locations is making you feel a little broke — even though, by all accounts, your finances are in pretty good shape. 

Or maybe you have the opposite problem. Your bank account and credit card balances are stretched to their limits, but you can’t stop making impulsive money decisions that stretch them further.  

Well, the internet has a (non-clinical) diagnosis for you: You have money dysmorphia. 

What is “money dysmorphia”?

Money dysmorphia is what happens when your relationship with money has turned a little sour. It’s a phrase the internet has invented to describe having a warped sense or understanding of your own finances — which then, in turn, leads to irrational, vibes-based decision-making. 

According to a survey by Credit Karma, <43% of Gen Z and 41% of millennials reported experiencing some form of money dysmorphia. 

Money dysmorphia can affect you wherever you are in your financial journey. You could have a healthy bank account, thriving investments, and a solid retirement plan — but still be plagued by a sense of scarcity or insecurity that restricts you from enjoying your money. 

This experience is especially common for people who grew up in financial precarity and spent much of their early years fighting overdraft fees and grocery shopping at the Dollar Tree. It can be difficult to switch gears as you level up and shake off that feeling of insufficiency, even if you’ve fully secured the bag. The Atlantic calls it “the phantom limb of poverty.” Writer Damon Young calls it “post-brokeness stress disorder.”

Whatever you call it, these feelings can be exacerbated by inflation, a cooling job market, and general uncertainty of the future. Even when inflation goes down, money stress (or the bad vibes of a volatile economy) can linger.

But money dysmorphia can be especially debilitating for those who are on the opposite side of the spectrum. When your finances are in disorder, money dysmorphia can cause you to impulsively make money decisions that deliver temporary dopamine rushes but leave your savings depleted and impair your ability to reach your financial goals in the long run. Like making a fun splurge purchase with money that was allocated for your debt payoff. 

And obviously, it doesn’t help to scroll through social media, where influencer and celebrity lifestyles make unaffordable luxuries feel far more attainable than they are. 

The Ellevest take 

At Ellevest, we believe that spending plans should give you the freedom to spend your money intentionally — while working toward your financial goals. We don’t think the two things should ever have to be mutually exclusive. 

Women may even feel money dysmorphia more acutely than men. We spend much of our lives internalizing toxic messages about women and money: “Women spend too frivolously.” “Women don’t know how to invest.” “Women are too risk-averse.” And on and on. 

These kinds of messages can make women feel incompetent (even when they’re not) when it comes to money — and therefore too anxious to spend their money even when they have it, or too financially unstable to take control of their money. 

And then there’s social influence. Women have far more societal pressure than men to spend money. For example, women may feel pressure to wear makeup and expensive clothing to the office, so they’re not seen as frumpy or unprofessional. Women are more likely to feel pressure to spend big at their friends’ bridal showers and bachelorettes. These kinds of social pressures can lead to impulsive money decisions that can negatively impact your long-term goals.  

That’s why we’re big proponents of implementing financial wellness practices that make you feel good about your money (and spending it the way you want to). 

How to fight money dysmorphia 

As you head into fall, money dysmorphia can feel especially severe. Maybe you just spent the entire summer splurging for every poolside opportunity. Or maybe you spent the summer pinching pennies, and are now feeling anxious about what autumn brings. 

Post-summer money clarity can feel overwhelming, but there are a few steps you can take to make it all feel more manageable. 

• Get to know your money situation. The more you know about your money, the better. We know it can sometimes be a little daunting to look at your bank account regularly, but knowing how much you have and where the rest of your money is going can help you make more mindful money decisions. Look at your statements and get a lay of your financial lands: Where do you spend your money most? 

• Figure out your core values. Do you want to prioritize dining out? Fancy candles? Donations to your local non-profit? Understanding your core values is key to building a budget that works for you. (Btw, we have a worksheet that can help with that. It’s complimentary for Ellevest clients.) 

• Create a budget that makes room for the fun stuff. (That’s literally what budgets are for.) Create a budget that helps you eliminate debt while building your emergency fund while allowing you to take impromptu trips to the Maldives. This budget should give you permission to indulge as your finances allow. We love the 50/30/20 method, but if your finances are a bit too complicated and you need some professional help, you can book a 1:1 session with one of our financial planners. 

• Invest, if you’re not already. When you’re investing toward the future, you feel better about spending money now. 

You deserve to live your best life now. Let go of money dysmorphia and welcome financial wellness into your life. As always, that’s what we’re here for.

Disclosures