“Money dysphoria”?

It sounds like a fake mental illness, but it’s not just another TikTok craze. It’s a very real confusion born of a very specific script. Let me show you:

• What do you have in your savings account? That’s never going to be enough. 
• Your student loans? It’ll take another decade for those to be paid. 
• At this rate, you can’t afford your car payment, much less takeout. Don’t forget about rent!
• Oh, and did I already introduce you to my good friend – inflation? 
• The government also stopped making pennies, so even your coins are worthless. 

What is money dysphoria? 

Money dysphoria is a feeling of insecurity about one’s financial situation, even if the reality isn’t cause for concern. It’s hard to make smart financial decisions if your perspective is distorted. Symptoms of money dysphoria include hoarding money, comparing your financial situation to others around you, or overspending. 

43% of Gen Z (and 41% of millennials) say they suffer from a flawed perception of their finances, according to a 2024 Credit Karma study. Another 48% of Gen Z say they feel financially left behind. Putting those two statistics together, it’s fair to ask: “Is this scarcity mindset accurate?”

Why Gen Z is vulnerable 

Gen Z is right to be concerned. 

The 2020 pandemic brought businesses and commerce to a halt, causing small businesses and corporations alike to pivot. My generation also grew up in the wake of the 2008 financial crisis. We always hear how tough we have it. Or even worse, we hear that by the time they were our age, other generations had already paid their mortgage and were financially secure. It’s harder to buy homes today, kids are expensive, and student debt is astronomical. Big corporations, once seen as beacons for the youthful and ambitious, are now slashing jobs. Worse, recent college graduates, especially men, are struggling to find jobs at all.

Adding to the anxiety, Gen Z is bombarded with news, information, and media 24/7 through the phone. Any statistic or problem you want to investigate, you can, at the touch of a button. 

Here’s where money dysphoria blinds Gen Z from the truth. 

Social media overload exacerbates financial envy with influencers vacationing on yachts and promoting their newest must-haves. This is where money dysphoria becomes chronic and blows finances out of proportion. If your feed is filled with expensive destinations, custom couture, and ads, it’s easy to think you are left behind if you don’t buy that item or take that trip. 

Mirror neurons fire when we ingest social media. When someone is excited on your feed, you empathize with what you watch, and you become excited. Similarly, ingesting yachts, expensive music festivals, and lifestyles beyond our budgets makes us think we should experience those things. We train our brains to have a sense of entitlement that we deserve those trips, those experiences, and end up being disappointed in our everyday life. There’s a solution to close that gap: make more money. 

Our brains, in an attempt to remedy things, forget that a curated lifestyle does not reflect reality. Instead, constantly seeing unattainable lifestyles spurs greed and lustful consumerism, which promises happiness and fulfillment but cannot deliver. 

It’s easy to see why 45% of millennials and Gen Z surveyed for the Credit Karma study also reported being obsessed with becoming rich. We’re not just obsessed: A recent Minds On Money report from Ally revealed that nearly 40 percent of Gen Z have admitted to going into debt to “keep up appearances” on social media. 

What to do if you’re experiencing money dysmorphia

It’s important to have a clear understanding of your finances, free from outside influences. Use a budgeting app to track your income, spending, and savings consistently. Rather than comparing your financial journey to others, focus on creating a plan that works for you. The goal is to reach your personal best with budgeting — not someone else’s version of success.

Reevaluating your social media use, and even limiting it, can also help alleviate money dysphoria. Remember, you can never know what someone’s true life is like from social media posts. Her financial reality doesn’t necessarily reflect in their feed. 

Money dysphoria stems from the gap between the life we want and the life we’re currently living — it’s less about our actual financial situation and more about our perception of it. It’s also worth asking: Can happiness be measured by a price tag?