In recent years, people have been talking more and more often about money dysmorphia, or financial dysmorphia. The term describes a distorted perception of one’s financial situation: people with adequate income or savings may feel constantly “behind,” while others may underestimate their financial problems. It is not an official clinical diagnosis, but an increasingly discussed psychological and social phenomenon among economists, psychologists, and the media.
When the perception of money does not match reality
Money dysmorphia arises from a disconnection between perception and financial reality. In practice, the way a person perceives their financial security does not match the real data of their income, assets, or spending capacity.
As explained by the Milano Psicologa psychology center, this distortion can manifest in opposite behaviors: some people obsessively check accounts and savings without ever feeling secure, while others spend impulsively to compensate for feelings of inadequacy or dissatisfaction.
In both cases, the result is the same: an emotionally complex relationship with money, which can generate anxiety, guilt, or not very rational financial decisions.
Why it mainly affects Gen Z and Millennials
The phenomenon seems to mainly concern younger generations. According to a 2024 study by Credit Karma, 43% of Gen Z and 41% of Millennials say they have a distorted perception of their finances.
Moreover, almost half of Gen Z (48%) say they feel behind others financially, while among Millennials the percentage rises to 59%.
This sense of inadequacy does not depend only on income. It often arises from constant comparison with economic standards perceived as normal but actually unrealistic.
As highlighted in an article by Vogue Italia, many young people find themselves in a paradoxical situation: they face inflation, low wages, and high living costs, while online they are constantly exposed to luxurious lifestyles and encouraged to purchase goods they cannot afford.
The role of the family
The research Parents and children: how much does the family matter in the approach to money use by new generations, carried out by the Museum of Saving in 2022, investigated the weight of the family in influencing the vision of money of new generations. The aim of the research was to understand whether money management models are part of the educational content offered by parents, how these contents are transmitted at a generational level, and how they are adopted by youngsters.
The value of money was measured through answers to questions about the relationship between money and mood, the link between money and satisfaction, and money as a tool to measure personal success. In this case, the agreement between parents and children on the statement “money is never too much” is high and is influenced by family income. Higher incomes correspond to a higher level of agreement.
The role of social media and “flex culture”
One of the main causes of financial dysmorphia is social comparison amplified by social media.
According to an article published by La Gazzetta del Pubblicitario, the phenomenon is closely linked to “flex culture,” from the English to flex (to flex muscles), which describes the act of “showing off” (flexing), that is, the habit of displaying online a rich and successful lifestyle to gain admiration or demonstrate superiority.
In this context, social media act as a permanent showcase: expensive trips, luxury restaurants, cars, investments, and professional successes become everyday content. Even when these images do not represent the real economic situation of those who post them, they help create standards perceived as normal.
The result is a dynamic similar to social comparison: the more apparently perfect lifestyles are observed, the more one’s own situation seems insufficient.
When financial anxiety becomes an emotional problem
Money dysmorphia concerns both money management and the way people associate emotions with money.
A study conducted in 2024 by Hype, in collaboration with Ipsos, on about 4,000 people shows that money is perceived as a priority especially among young people: 72% of those aged 18 to 24 and 68% of those aged 25 to 34 consider it central in their lives.
The same survey shows that 61% of respondents believe that money is never enough, a figure that reflects a widespread sense of financial dissatisfaction.
Interestingly, the research also suggests a paradox: high levels of financial anxiety can also appear among people with good financial availability, a sign that the problem concerns perception more than the real economic situation.
Why it is important to talk about it
Money dysmorphia shows how much the relationship with money is influenced by psychological, cultural, and social factors.
When financial perception becomes distorted, people may:
• feel constantly behind others
• make impulsive spending decisions
• give up economic opportunities out of fear of the future
• live with anxiety even in the presence of a stable situation
Learning to distinguish between economic reality and the social perception of money is one of the first steps to building a more balanced relationship with one’s finances.
For this reason, many experts emphasize the importance of financial education, awareness of one’s numbers, and greater distance from social comparison.
To avoid falling behind, build a good level of financial education that helps you manage your money consciously: attend in-person and online activities of the Museum of Saving, follow our blog, and browse the numerous publications you can find on the website www.museodelrisparmio.it.
March 25, 2026