One emerging concept that has gained traction in recent months is money dysmorphia—a psychological phenomenon where an individual has a distorted perception of their financial situation, regardless of their actual wealth or income.
Money is an unavoidable part of life, but how we perceive it can significantly impact our financial wellbeing.
This condition can lead to stress, poor financial decisions, and even mental health struggles.
What is Money Dysmorphia?
Money dysmorphia occurs when a person’s perception of their financial reality is skewed. For example:
- Someone with a comfortable income may feel persistently anxious about money, fearing they are on the brink of financial ruin.
- A high earner might believe they are significantly underpaid compared to their peers, despite earning well above the national average.
- An individual from a lower-income background who has achieved financial stability may still experience feelings of scarcity and insecurity.
This condition shares similarities with body dysmorphia, where individuals have a distorted view of their physical appearance. In the case of money dysmorphia, the distortion applies to financial security, wealth, and personal financial standing.
Why is Money Dysmorphia Increasing?
Several factors contribute to the rise of money dysmorphia, particularly in the UK:
- Social Media and Wealth Comparison
Platforms like Instagram and TikTok have become breeding grounds for financial comparison. Seeing influencers flaunt designer goods, luxury holidays, and seemingly endless streams of income can make individuals feel inadequate, even if they are financially stable.
- Economic Uncertainty
The UK has faced significant economic challenges in recent years, including the cost-of-living crisis, inflation, and housing affordability issues. These uncertainties can exacerbate financial anxiety, making people feel more insecure about their money, even when they are in a strong financial position.
- Cultural and Upbringing Influences
For many, attitudes towards money are shaped in childhood. If someone grew up in a financially unstable household, they may struggle to feel secure, no matter how much they earn in adulthood.
The Consequences of Money Dysmorphia
Having a distorted view of one’s finances can lead to real-life consequences, including:
- Impulsive spending: Others may react to feelings of financial inadequacy by overspending to “keep up” with peers or influencers.
- Strained relationships: Misalignments in financial perspectives can cause tension in personal and professional relationships.
- Mental health struggles: Anxiety, depression, and chronic stress can arise from persistent financial insecurity, whether real or imagined.
Overcoming Money Dysmorphia
If you suspect you or someone you know is struggling with money dysmorphia, there are steps you can take to develop a healthier relationship with finances:
- Assess Your Money Mindset
Regularly review your income, expenses, and savings to get a clear picture of where you stand. Our CPD Certified Money Mindset workshop helps individuals take better control of their spending habits and relationship with money. - Limit Social Media Exposure
If financial comparison is affecting your well-being, consider unfollowing accounts that trigger negative feelings and focus on content that promotes healthy financial habits. - Seek Professional Guidance
Money Guides can provide practical insights, and offer signposting and guidance. Learn more about our Money Guide Service here. - Practice Gratitude and Mindfulness
Recognising financial achievements—big or small—can help shift your mindset from scarcity to abundance. - Have Open Conversations About Money
Speaking with trusted friends, family, or an expert Money Guide can provide perspective and reduce financial stress.
Money Dysmorphia: Final Thoughts
Money dysmorphia is a real and growing issue, particularly in the UK, where economic challenges and social pressures fuel financial anxiety. By recognising the signs and taking proactive steps, individuals can work towards a healthier, more realistic view of their financial situation.
