- "Money dysmorphia" is when people have a distorted view of their finances.
- For instance, wealthy Americans who have anxiety over not making enough money.
- Financial planners say getting over money dysmorphia starts with taking an honest look at your finances.
Money dysmorphia can take different forms.
A common problem among the privileged is wealthy people feeling like they do not have enough, regardless of how much money they have.
About 51% of people earning more than six figures reported living paycheck-to-paycheck in a survey conducted last year — despite making well over the median household income.
Another survey from April had a similar finding, with 49% of high-earners reporting the same.
Bloomberg reported in August that of the more than 1,000 people they surveyed making at least $175,000 a year, 25% described themself as "very poor," "poor," or "getting by but things are tight."
Bloomberg reported that an income of $175,000 would be in the top 10% of tax filers.
While some of those surveyed may indeed be struggling to pay the bills, they may also be suffering from "money dysmorphia."
"Money dysmorphia is the distorted view that we have of our financial reality, and it causes us to make poor decisions," Ali Katz, an attorney who specializes in family and financial planning, told Business Insider.
The mindset can cause people to make poor financial and personal decisions, Katz said. It could cause them to stay in a job they hate, prioritize working more over quality time with family, or lead them to put off pursuing greater career ambitions like starting a business because they think they need to be wealthier first. It can also cause constant and undue stress.
Katz calls them "more, more, more people."
Money dysmorphia can happen when you make 'dangerous' money
While money dysmorphia impacts people of any generation, millennials today may feel it more than others. A survey last month found that millennials think they need an annual salary of $525,000 in order to be happy — four times as much as other generations.
Gideon Drucker, a financial planner at Drucker Wealth, said this is something he sees with his clients, who are typically young families in their 30s and 40s who are making great money.
"By any objective measure, they're rich," Drucker told Business Insider, "but they don't have that feeling."
Drucker said it's often folks who make what he calls a "dangerous amount of money," or roughly $250,000 to $750,000 a year, depending on where you live.
If you are making below that range, say $75,000 a year, you generally have to be very disciplined with how you spend, save, and budget. On the other hand, if you're making $5 million a year, you'll likely save enough for the future just by accident unless you go crazy with spending.
People in the dangerous money range can generally afford everything they want and need on a day-to-day basis. However, they're not so wealthy that they can ignore planning for the future. "Retirement isn't going to take care of itself," Drucker explained.
For these people, he said, the feeling that they don't have enough tends to stem from not having a clear view of their finances. Sometimes, after he starts working with a client, they realize they are better prepared and saving more money for the future than they thought they were.
As for high-earners who report living paycheck to paycheck, Drucker said what he sees with his clients is that it's all relative, and they may be comparing themselves to how they think other wealthy people are doing.
"That might mean, 'I'm maxing out my 401k. I'm sending my kids to private school. I have high property taxes. I'm putting money into my emergency reserves,'" he explained, but added that they then "don't have as much money left over as they would like to."
Ultimately, financial anxiety is often not about the actual dollar amount — it's the uncertainty. "It is the unknown that creates that anxiety more than the objective numbers," he said.
Map out what you have, what you need, and what you want
Katz also said the first thing a person experiencing money dysmorphia or financial anxiety should do is take an honest accounting of their situation — not just how much they have, but also how much they need and how much they want.
"You have to know the difference between what you need and what you want," she said, adding that first, people should sit down and figure out how much is enough for them, and not just for the future and retirement, but as a current number.
She also said it's important to recognize that the current number of what is "enough" will change over your life. "Map where you are now, and map your next stage of enough," she said.
Drucker agreed that planning can help people get over that financial anxiety because rather than constantly comparing to others and wanting more, setting and meeting goals can help people feel confident they are making enough to provide for their family.
He also emphasized the importance of balancing current happiness with future needs and therefore, not saving too much — a problem that is impacting some HENRYs, or high earners, not rich yet.
"Successful financial planning is not deferring all happiness and gratitude until you're 75 years old with millions of dollars," he said. "How do you make sure that you are living life to the fullest, you're enjoying day-to-day in a way that isn't detrimental to your future self?"