Why Millennial & Gen Z Parents Are Talking About Money Dysmorphia

“Cycle-breaking” is a buzzy term in the parenting zeitgeist. Millennial and Gen Z parents often strive to be more emotionally attuned to their little ones — less “do this because I said so” and more “I see you’re having a tough time.” But today’s parents of young children likely grew up and graduated from high school or college amid tough financial times, leading to a rising trend of what’s known as “money dysphoria.”

“People with money dysphoria often feel chronically anxious, overwhelmed, and stressed about their finances,” explains Dr. Emily Guarnotta, a psychologist and the owner of Phoenix Health. “It can also include obsessive thoughts about money and feeling like a person does not have enough of it. This stress often trickles into other areas of a person’s life, like their relationships.”

These relationships include the ones we have with our children, which is why Guarnotta and other mental health and financial experts stress it’s important to “break the cycle” of money dysphoria.

“Finances are a significant source of stress for many new parents, and chronic stress is a risk factor for experiencing mental health conditions during the perinatal period, like postpartum anxiety and depression,” Guarnotta shares. “Children also learn a lot about their own relationships with money by observing their parents. You might unintentionally project your own fears onto your child, which can shape how they feel about money as they get older.”

We reached out to Guarnotta and other financial and mental health pros for valuable insights on money dysmorphia, including why it’s happening, symptoms, and coping strategies, so that you can stop feeling in the red emotionally.

OK, what exactly is money dysmorphia?

It’s not a clinical mental health diagnosis, but experts say it’s a genuine experience. “Money dysmorphia is a phenomenon where an individual has a distorted view of their finances, regardless of their actual reality, and can create feelings of financial insecurity and lead to poor financial choices,” says Courtney Alev, a consumer financial advocate at Intuit Credit Karma.

For instance, you may objectively have enough to pay for something and reach your financial goals, but your mind may subjectively disagree, explains Dr. Brandy Smith, a licensed psychologist specializing in life transitions and stress with Thriveworks. It can hold you back from taking the steps you need to better your own — and your family’s — financial and overall well-being, like putting aside money for retirement or your child’s future education, or purchasing a home in your dream neighborhood.

If you have money dysmorphia, you’re not alone: Nearly 30% of people reported having money dysmorphia, in one study by Qualtrics for Intuit Credit Karma.

Guarnotta reports that some common symptoms of money dysmorphia include:

• Constant worry and fear about not having enough money
• Compulsively checking your bank account, credit card statements, or investment portfolios
• Avoiding looking at your finances (the opposite of compulsive checking, both are driven by fear)
• Extreme patterns of spending, such as overspending or being extremely frugal
• Constantly comparing your financial situation to others
• Feelings of shame or embarrassment about your financial situation
• Feeling irritable or on edge when money topics come up

Why does money dysmorphia happen?

It’s almost cliché to say it at this point, but social media is a breeding ground for comparison and FOMO. “Money dysmorphia can stem from a place of comparison, and is often amplified by social media,” Alev says. “Certain online content that implies a high financial status can create insecurity when people compare others’ perceived wealth to their own.”

While people of any age can fall victim to comparison and FOMO on social media (and off of it), millennials and Gen-Zers came of age or grew up on social media. That is one reason Alev reports that 43% of Gen Z and 41% of millennials reported money dysmorphia in the Intuit Credit Karma study. However, it doesn’t tell the whole story.

“Millennials and Gen Z have faced some unique financial challenges that can make them especially prone to money dysmorphia,” Alev says. “Many millennials graduated into the Great Recession, which meant fewer job opportunities and lower starting salaries at a critical point in their careers. Gen Z came of age during the pandemic, which not only disrupted education and early career opportunities but also heightened social media use, creating a constant comparison trap.”

And lest we forget...

“Add in record-high housing costs, student loan debt, and inflation, and you have generations that have experienced repeated financial instability while being bombarded with curated images of what success ‘should’ look like,” Alev notes. “That mix can make it harder to feel secure, even if you’re doing well by objective measures.”

What are some tips for new parents to cope with money dysmorphia?

Experts stress the real (exhorborant childcare costs) and perceived (never having “enough) can worsen money dysmorphia during the new parent stage. But it’s not inevitable. They shared golden insights to empower you to manage money dysmorphia and heal your relationship with finances. That way, you can pass on a different kind of generational wealth to your little one — a healthier relationship with money.

1. Check in regularly about finances.

Alev suggests having regular monthly check-ins.

“Becoming a parent changes your financial picture overnight,” Alev says. “Setting aside time each month to review expenses, adjust budgets, and talk through priorities can help you stay on track and avoid resentment or surprises. There’s power in knowing where you stand financially.”

2. Practice mindfulness.

Once you’ve established a time and cadence for financial ins, stick to it. This means avoiding the money dysmorphia version of “doom scrolling.” Here, instead of social media, you may find yourself obsessively checking your accounts.

“Resist the urge to check outside of this dedicated time,” she says. “If you feel anxiety or fear, take a deep breath and remember that this is valuable information. Try to focus on solutions, not past mistakes.”

3. Create a realistic baby budget before the baby arrives.

While prices of goods can rise and fall, try your best to get a gauge on them before your baby arrives. “Knowing what’s coming can help you prioritize purchases and avoid last-minute splurges that might strain your finances,” Alev explains.

Alev suggests mapping out one-time expenses, like a crib or stroller. Ongoing expenses, such as diapers, formula (if applicable), and childcare costs (if applicable), should also be included in the budget.

4. Shift your mindset about budget.

Are you shuddering because we used the B word above? If so, Guarnotta gets it.

“Some people have a visceral reaction to the word 'budget,” but the reality is that a budget is about setting guidelines that allow you to align your spending with what truly matters to you and your family,” she says. “Instead of viewing it as restricting, think of it as a plan that allows you to live the life that you want.”

During a calm pre-baby financial check-in (and ones that come after), you might discuss values on money and the future. “For example, is it important that you take a vacation once a year or contribute to your child’s college fund? Then, let these values guide your financial planning,” Guarnotta suggests.

5. Normalize not buying the “latest” and “greatest.”

New is not always necessary. “As a new/expectant parent, it is worth considering ways to make it normative that the latest version of everything is not absolutely necessary,” Smith says.

For instance, you might do just fine with second-hand baby clothes — infants grow quickly (and should we discuss spit-up and diaper explosions?).

“Plus, it is worth remembering for yourself and modeling it for your child that sometimes the latest isn’t actually the greatest,” Smith suggests. “It is just a tag line that is intended to make people think they ‘have’ to get the most updated version as soon as possible. Sometimes it is advisable to give the new version time for the kinks to be worked out and then get it later.”

6. Get creative with childcare (if possible).

This one is going to depend on your access to paid leave at work (which the United States, unlike other developed countries, maddeningly does not guarantee). A Care.com 2025 report found that parents spent an average of 22% of their household income on childcare.

If applicable, Mary Clements Evans, the author of Emotionally Invested and a financial advisor with RJFS at Evans Wealth Strategies, suggests considering whether you and your partner can take parental leave at different times (yes, men are included!).

“Saving those months of child care is a big deal,” Clements said. “Plus, the baby and Dad will get time together.”

Clements is also seeing more grandparents pitch in with childcare during the week, and some parents are splitting shifts, such as one person working days and another working nights. It may not be ideal (or fair), but it might be worth it if it helps you reduce long-term financial stress.

7. Plan ahead.

College savings is a large goal — one that people with money dysmorphia may be afraid to think about, preventing them from going after short-term financial needs. It doesn’t help that today’s new parents may still be paying off their own loans. Still, Alev stresses that small, consistent contributions add up.

“Automating the process helps you build toward long-term goals without having to think about it each month,” Alev says. “It’s a powerful reminder that you’re prioritizing your child’s future and reinforces your role as a responsible, proactive parent.”

You can also re-imagine holiday wish lists, especially with family members. Clements suggests asking for 529 account contributions instead.

8. Curate your social media feed.

Minimizing FOMO can minimize money dysmorphia flare-ups. “Taking control of your social media use is one way to manage how you feel about money,” Dr. Guarnotta says. “Go through your social media account and unfollow or mute any accounts that don’t make you feel good. This could be influencers or even peers who make you feel ‘less than.’” (This is just good life advice, in general.)

Guarnotta suggests seeking out accounts that offer valuable tips for investing and budgeting to enhance your financial literacy.

9. Focus on frugal family fun.

Listen, we need money. We pay to live on this earth, after all. But you don’t necessarily need a boatload of cash to make core memories with your family.

“Create an environment where fun can be had without spending money — or as much money,” Smith says. “Sometimes, people have the view that they can ‘only' have a good time if they are out and about spending money.”

Exploring local libraries (which often have free or reduced-cost museum tickets), heading to a local park, and family picnics in the living room are all ways to have more fun (for less money). And Smith points out that, in opting for these kinds of experiences, you’ll pass on the idea to your kids that something doesn’t have to be expensive to be fun.

10. Find support.

Cycle-breaking is hard, whether you’re trying to yell at your kids less or heal financial wounds. Need-to-know info: You don’t have to go it alone.

“Shame thrives in the dark,” Guarnotta says. “Voicing your feelings to someone you trust, like your partner, a family member, or a friend, can help you feel less alone and also provide another perspective. They might also be able to help you explore your options and identify realistic solutions.”

If your money dysphoria is causing you to feel anxious or depressed, or is negatively impacting your relationships, Guarnotta suggests that you might benefit from speaking with a professional.

“A good therapist can help you not only get to the root of your financial anxiety, but also shift your perspective and develop healthy coping techniques,” Dr. Guarnotta says. “Your therapist’s job is to help you better cope with financial demands and develop a healthier relationship with money, not to tell you what to do with your money or how to spend it.”

And you can then pay it forward with your kid(s).