How to Deal With Your “money Dysmorphia”
Do you constantly feel broke even if your bank account is in order? Are you obsessed with small purchases, even if you can afford them? If your perception of your own financial situation is inconsistent with reality, you may experience a type of “money dysmorphia.” This is not an official diagnosis, but a fancy term for a general discrepancy between our thoughts about money and our actual behavior. I spoke with financial therapist Lindsay Bryan-Podvin to better understand what skews our perception of our finances and what we can do to bridge the gap between perception and reality.
What is money dysmorphia?
First of all, Bryan-Podvin notes that “a more accurate term here would be ‘cognitive dissonance,'” or the distance between how you perceive yourself and how you actually behave. You might consider yourself a frugal person, but checking your latest bank statement will reveal a lot of unnecessary takeout orders. On the other hand, Bryan-Podvin gives an example of people who set lofty New Year’s resolutions only to set themselves up for disappointment when they fail to save $1,000 by January 31st. In her financial therapy practice, Bryan-Podvin has noticed that the people who struggle with this the most are perfectionists. Paralyzed by the fear of failure, they never allow themselves to make the changes they know they want to make. If this sounds like you, let’s look at some tips on what you can do to cope.
What to do if you have money dysmorphia
Brian-Podvin gives an example exercise: Take a piece of paper. On one end, write down your goals: Where do you want to be financially? On the other end of the sheet, write down where you are now. Now your job is to bridge the gap between these two points. Create a timeline: What goals will help you connect these dots? For example, let’s say you want to save $5,000 in an emergency fund . Your immediate goal might be to save $50, then $100, and so on. Beyond these goals, what behaviors do you need to implement to save these amounts? Maybe it’s ordering fewer Lyfts or learning how to cook a meal .
Here are some more specific tips to help bridge the gap between where you want to be and where you are now.
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Track your expenses in detail . Keep a log of all your expenses for 1-2 months to get an accurate picture of where your money is going. See exactly how much is spent on needs and wants. This gives you concrete data to help you counteract the feeling of being broke.
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Automate saving and investing . Set up automatic transfers from every paycheck to savings and investment accounts. Get to the point where you can create long-term wealth that you will see grow.
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Eliminate unnecessary expenses . Examine the ongoing costs of subscriptions, memberships, and services you rarely use. Cut expenses that don’t add much value.
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Avoid social comparisons . Don’t compare your financial progress to others. Focus on your goals and needs.
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Celebrate financial victories . Celebrate milestones such as paying off debt, reaching a savings goal, or making smart investments. Give yourself credit.
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Find balance . Allow reasonable, affordable treats without guilt. Watch out for excessive financial anxiety. Don’t let money control your life.
Finally, Bryan-Podvin emphasizes the importance of accountability. As I said earlier, we are not as immune to financial pressure from colleagues as we would like to think. “Voicing your goals out loud to people whose opinions you value makes a huge difference,” says Bryan-Podvin. People don’t have to tell people about your spending habits to respect your budget and your boundaries; real friends will happily try cheaper alternatives with you.
If you encounter difficulties, seek support. See a financial therapist , like Brian-Podvin. Over time, the money dysmorphic mindset can be retrained. The right strategies and professional support can help your perceptions better align with your financial reality.