We all have a unique relationship with our finances determined by our upbringing, culture, generation, and more. These influences can alter our perception of our finances and impact our choices, sometimes in negative ways.
When a person has a distorted or unhealthy perception of their financial situation, it can be considered a form of “money dysmorphia.” Although not a formally recognized psychological condition, the term is increasingly used to describe irrational beliefs or feelings about wealth, spending, or financial stability.
If this sounds familiar, you may be wondering if you have money dysmorphia. Learn more about the signs and symptoms, and what to do if you’re having difficulty.
Drawing parallels to the mental health condition of body dysmorphic disorder (BDD), commonly known as body dysmorphia, money dysmorphia refers to a distorted perception of your financial situation that does not match reality.
For example, money dysmorphia can cause stress and anxiety around spending money, even if you earn enough to cover all your costs. Or it can lead you to overspend and have a distorted view of what you can really afford.
According to a 2024 study conducted by Qualtrics on behalf of Intuit Credit Karma, 29% of Americans experience money dysmorphia, with younger generations more likely to report feelings of financial inadequacy (43% of Generation Z and 41% of millennials).
Monetary dysmorphia does not manifest itself in the same way in all people. Some key indicators that you may be struggling with money dysmorphia may include:
-
Avoid checking your bank account balances or constantly checking your account balances.
-
Maximize your credit cards
-
Constantly worrying about not saving enough money
-
Avoid spending any amount of money or making financial decisions because it causes anxiety.
-
Feeling guilty or ashamed after spending money.
-
Feeling like you don’t have enough money
-
Constantly compare your financial situation with that of others.
Read more: Most Americans Not Satisfied With Their Savings, Survey Finds
Regardless of how monetary dysmorphia presents, the consequences can be serious and far-reaching.
“The reality is that monetary dysmorphia can hold people back personally and financially,” said Han Lim Kim, a licensed clinical psychologist at Clarity Therapy NYC. “You may be losing or damaging relationships by avoiding spending money on activities with friends and family and missing out on the joys associated with these interactions. “You may hoard cash or just keep money in a savings account, missing out on opportunities to invest appropriately.”
There is no singular root cause of monetary dysmorphia. Knowing how to combat it will require you to do some work to discover where the disconnect lies between the state of your finances and your relationship with money.
If you think you may be struggling with money dysmorphia, there are some steps you can take to resolve it.
Pay close attention to your feelings about money. Take note of the times when you feel most anxious. Does checking your bank account balance make you anxious? Do you instantly regret it after making a purchase?
Identifying times when illogical or unwarranted feelings around money arise can help you implement the right strategies to ground yourself and adjust your perception.
Having a budget and a clear idea of your income and expenses each month can give you peace of mind and calm any fears you may have about being able to cover your expenses each month or save for the future. Set a time each month to review your account balances and track your progress toward future goals, so any feelings you have about money can be based on facts.
Read more: Your Guide to Budgeting for 2025
Negative thoughts about money can lead you to adopt a scarcity mindset. Kim suggested reframing those thoughts to see your financial situation in a more positive light.
“Thoughts like ‘I’m bad with money’ or ‘If I go out to dinner tonight, I’ll never be able to retire’ can be reframed by examining the facts and creating a more balanced perspective,” he said.
Instead, these negative thoughts can be adjusted to “I haven’t learned how to budget yet, but I can start now” or “That restaurant may be out of my budget, but I can suggest a more affordable option,” she said. explained.
Financial advisors are not just for the rich; They work with all types of people from various economic backgrounds. Talking to a professional can help you get a clear idea of where your finances are and create a plan to achieve your goals, which can ease your financial anxieties.
Read more: What is a financial advisor and what does he or she do?
“I worked with a client who told me that even though he knew he was going to be fine financially, he always woke up every morning with a knot in his stomach and thought something terrible was going to happen,” said Michael Liersch, director of counseling and planning. for Wells Fargo. “While it had been helpful to him when he started and built his business, he realized that it was interfering with his ability to enjoy retirement and family. The central problem was that I did not have a goal-based plan.”
Liersch explained that together they created a plan that outlined their client’s goals, assets and spending patterns and then projected it over time. “That part ensured that the technical aspects of your financial life were covered,” he said. “But he also needed to feel psychologically safe.”
Liersch said seeing the plan in digital format gave his client peace of mind each morning, knowing that if he ever went off course, he would know immediately so he could take action. “That calmed him down and he was able to live his life.”
Read more: 5 psychological money tricks to reduce spending and increase savings