You’re Richer Than You Feel: Combatting Money Dysmorphia

Linda Du
Jul 17
3 min read

Updated: Jul 30

Despite rising incomes and better financial tools than ever before, many individuals, particularly millennials and Gen Z, feel financially insecure. A recent article in the Financial Times labelled this phenomenon “money dysmorphia”: a disconnect between individuals’ perceived and actual financial health.

At Moola Money, we’ve observed this pattern many times. When users go through our financial modeling, they are often surprised to discover that their financial position is significantly stronger than they assumed.

The Reality: Better Than You Think

Our early Alpha tests are showing that many users underestimate their net wealth, the long-term value of their savings and pension contributions, and the financial resilience they already possess. By aggregating their income, expenses, and assets into a single, comprehensible view, we often find that:

Short-term anxiety often masks long-term financial strength. Users think they need to have a masters degree in finance to access certain products, when often the best actions to take are the simplest ones.
Many users are already taking smart financial steps (such as taking out private pensions and ISAs) they just don’t recognize them as such, or feel like they could be doing more.
Simple adjustments (e.g., switching to a higher-yield savings product, consolidating debt, or increasing pension contributions) can materially shift a financial trajectory over the course of decades.
Often people could meet all of their stated financial goals without changing anything about their financial situation, which suggests opportunities to be more ambitious in goal-setting.

This insight is foundational to our mission: to provide clarity, confidence, and control over your financial future.

Why Do People Feel Poorer Than They Are?

This pervasive misperception has several psychological and structural roots:

Comparison Culture and Social Media Influence
Exposure to curated lifestyles on social platforms has intensified financial anxiety. According to a survey by Bankrate, nearly 40% of Gen Z and millennials say social media negatively impacts how they view their finances. Constant comparisons to others’ apparent success distort a person’s view of their own financial reality.
Limited Financial Literacy
Despite higher education levels, fewer than 30% of college-educated millennials have received any formal financial education. Without a clear framework for evaluating progress, many default to negative self-assessments.
Cognitive Biases
Behavioral finance research shows that loss aversion—the tendency to feel losses more acutely than equivalent gains—can make individuals overly cautious or pessimistic about their financial standing. Similarly, recency bias causes people to focus excessively on recent spending or income shortfalls rather than long-term trends.
Fragmented Financial Information
Without consolidated tools, people manage their finances in silos: a bank account here, a pension there, a loan on the side. This fragmentation clouds the bigger picture. According to the FCA, more than half of UK adults did not have confidence in the UK financial services industry, despite having multiple financial products.

Why We’re Building Moola Money

At Moola Money, we believe financial empowerment starts with visibility. Our platform delivers a clear, actionable picture of your financial situation; incorporating psychographic assessment, cash flow and wealth modeling, and goal setting, to unlock the confidence people need to take meaningful steps forward

We're designing a financial guidance platform that shows you where you stand and what you can do next, grounded in real data, behavioral economics and best practices.