This Toxic Money Habit Is Becoming More Common — If You've Picked It Up, Your Finances Are at Serious Risk, Expert Warns Kaitlin Walsh-Epstein, chief marketing officer at digital banking platform Laurel Road, reveals the frequent mistake.
By Amanda Breen Edited by Jessica Thomas
Many Americans believe social media offers an inaccurate picture of wealth and success; 57% of social media users say that people post to appear more successful, and 51% of users say that social media depicts "unrealistic lifestyles," according to a 2023 Bankrate survey.
Even so, many of them can't help but get caught up in the cycle of comparison. Between 2022 and 2023, U.S. adults spent $71 billion on "impulse buys" they were influenced to make by social media, per Bankrate's data — a fact that backs up an increase in "money dysmorphia."
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"Money dysmorphia is a distorted or skewed perspective about one's financial situation caused by comparison to others," Kaitlin Walsh-Epstein, chief marketing officer at digital banking platform Laurel Road, tells Entrepreneur. "If you're experiencing money dysmorphia, you may often feel insecure about your financial standing driven by frequently comparing your finances to your peers, influencers or celebrities, either in real life or online."
The rise of social media means seeing a continuous stream of "lavish lifestyles," "luxurious trips" and "expensive purchases" that aren't within most people's budgets, Walsh-Epstein explains. As time goes on, the constant comparison often brings "increased stress and feelings of inadequacy that can negatively impact your overall wellbeing and mental health," she adds.
Some people experiencing money dysmorphia might even take a dangerous next step — changing up spending habits or prioritizing different goals, which can do serious damage to long-term financial plans, Walsh-Epstein warns.
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The first step to breaking free of this toxic money habit? According to Walsh-Epstein, it's critical to stop comparing yourself to others and get fully acquainted with your financial situation so you can put together a plan and budget that will help you meet long-term goals. Additionally, start considering if a purchase is a need or a want, as making that distinction will help keep you on track.
"It is important to have a financial plan regardless of how much money you are making," Walsh-Epstein says. "If you're just starting out, create a financial plan or budget with attainable goals to work toward to help develop a sense of accomplishment."
