INDIANAPOLIS — Sitting down to look at your finances can be overwhelming. You may discover you’re doing better than you thought or worse. Some experts are calling that disconnect “money dysmorphia.”
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"That could mean you feel really badly about your money, and you feel like you’re making bad decisions, but in actuality you’re doing a pretty good job,” said Kimberly Palmer, a personal finance expert at NerdWallet.
It can also work the other way around.
“You feel like you’re doing amazing, but you’re actually overspending and building up debt,” Palmer said. “It basically means you need a more accurate picture of your finances.”
Palmer said money dysmorphia can stem from childhood experiences.
“If you had different experiences with how your parents talked about money, income insecurity, housing insecurity, that can lead you to make decisions as an adult that are out of sync with your actual finances,” she said.
Social media can also play a role.
“It’s so amazing, all the different lifestyles we can see when we’re scrolling through social media,” Palmer said. “We can see the most luxurious lifestyles possible, and that may not be feasible to us, but it makes us feel like it should be.”
Mo Buell, a mother of preteen daughters, said she sees how online images can influence spending habits. She uses platforms like Instagram and Pinterest, but works to keep a realistic mindset at home
“Just having preteen daughters, being like, ‘Nope, it’s not real. Everything is fake,’” Buell said.
She also tries to model financial priorities for her children.
“Living out those priorities for them, being like, ‘My shirt was $20, not the $500 one,’” she said.
To get a more realistic view of your finances, Palmer recommends doing a quick budget check-in and following the 50-30-20 rule: 50% of take-home pay goes to needs, 30% to wants and 20% to savings and debt payments.
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