What is Money Dysmorphia?

The word dysmorphia means a mental health disorder where one spends a lot of time unnecessarily worrying about an imagined lack of a desirable trait. You might have head of body dysmorphia, muscle dysmorphia. So what exactly is "money dysmorphia". 

A recent study shows a growing number of Gen Z and millennials facing this issue. Young families in their 30s and 40's are earning a decent incomes and can be classified as being "rich"; however, they themselves do not feel like it as they are generally comparing their financial status with some one else. They feel they do not have enough. There is a FOMO factor which often leads to poor financial decisions and high spends on things that you do not need just to feel familiarity of a association with a specific cohort or to "fit in". 

One of the major reasons for this is wrong and unfavorable comparisons. Feeling inadequate when you see your favorite sports icons, movie stars, celebrities, influencers showing off their lifestyles, holidays and happy lives. Such comparisons are not based on reality and are the main cause of unhealthy lifestyle inflation. A healthy increment in the standard of living is absolutely fine, but chasing other's dreams can be harmful. 

How does one deal with this?

1. If is fine if one can look at others and dreams to reach the "coveted" lifestyle. But that is merely a goal to work towards and not something that must be done immediately. Fulfilling these desirable things without having the financial capacity to do so will only fuel the fire to move to the "next" step in the lifestyle ladder as the role models will now change.

2. Be watchful of discretionary spends. Make sure that the spends are not overstretching your limits. 

3. Use credit cards and EMIs only for "must haves" and not "dream to haves". To give a perspective, you live alone and need a car to go to work; an EMI for a car is fine. But buying a large SUV instead of a small car, merely because that is the current status symbol, is a stretch. 

4. Have clear financial goals. This will make you mindful while budgeting and spending.