The term ‘Money Dysmorphia’ is having a moment. In the 12 months between January 2024 and 2025 there was 136% uplift in Google searches for it. It describes a disconnect between how people feel about their finances and the reality of their financial situation. This mindset can lead to extremes, whether that’s feeling excessively anxious and avoiding reasonable spending or overestimating financial security and overspending as a result.
Along with Christie Cook, director of retail, we take a deeper look at what Money Dysmorphia is, it’s potential causes and what we can do it about.
What is Money Dysmorphia?
Searches for ‘Money Dysmorphia’ in recent months suggest there’s a growing number of people struggling with understanding their own financial position. They may be feeling heightened anxiety about money, even when they’re objectively in a stable financial position. On the other hand, some people may overextend themselves, regularly living and spending beyond their financial means.
Christy Cook explains:
“With social media fuelling unrealistic comparisons and constant negative news about the Cost-of-Living crisis, it’s no surprise that many people are experiencing financial anxiety.
“Those who suffer with Money Dysmorphia can demonstrate extremely unhealthy spending habits. Some people overspend, believing they have more money than they do – it can lead to racking up debt on credit cards and overdrafts, potentially landing themselves in financial difficulty.
“On the other hand, some may become overly frugal as they feel the need to make some serious cutbacks. They may avoid small expenses like going out for a meal, even if they can afford it, as they’re financially insecure and worry their savings aren’t as high as they need to be.”
Possible causes of Money Dysmorphia
Christie identifies three key factors which may contribute to feelings of Money Dysmorphia:
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Cost-of-living crisis
We’re hearing about financial uncertainty multiple times a week in the media. This can lead to panic-saving. People may feel more in control if they put every single pound away in case of emergencies, when they already have a savings account that could get them through any unexpected costs.
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Childhood financial environment
Growing up around people, such as parents, who suffered financial hardship can shape attitudes into your adulthood. It's important to recognise your own worth, and how your finances are different.
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Past financial trauma
If you’ve experienced bankruptcy or finance fraud in the past, it can leave you feeling more anxious about dealing with money, even if your financial situation is now stable or there’s no immediate risk.
How do you recognise if you have Money Dysmorphia?
As a new concept, Money Dysmorphia can go unrecognised, but some common signs can include:
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Persistent financial anxiety
The most obvious way to recognise if you suffer from Money Dysmorphia is by worrying about money too much when there is no immediate danger, such as losing assets or heading into bankruptcy. If checking your bank balance causes you stress or panic, or you feel guilty about how much you earn or save, then this could be a trait of Money Dysmorphia. If these feelings sound familiar, it’s worth researching or speaking to a therapist about.
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Self-sabotaging financial habits
If you’re often covering the costs for other people, such as buying them lunch, or offering to take them places when you can’t afford to, this could be a sign that you’re suffering from Money Dysmorphia. Equally, if you avoid bank statements or dealing with financial issues, then you could be in denial about how much you’re spending - ignorance isn’t always bliss, especially if it means you’re paying interest or late fees by ignoring these.
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Your mood changes at the thought of money
Does an unexpected expense like a parking fine ruin your entire week, even when you can afford to pay it? Or do you feel undeserving of financial success, and pay-rises? These excessive emotional reactions to money are a major trait of Money Dysmorphia.
Christie’s tips on overcoming Money Dysmorphia
If any of the above resonated with you, know that you’re not alone Christie offers several practical steps to begin addressing these feelings:
- Tracking your spending, and making note of key spending habits, will help you realise you’re either overspending and need to get it under control. You may even realise you have more flexibility than you thought.
- Don’t compare your financial situation with others. Benchmarking yourself against influencers or high-earning friends can distort your own financial reality. Focus on your own financial journey.
- Set up savings pots with different goals. For example, one could be towards Christmas and one for emergencies. It can help you feel more in control of your finances, giving you peace of mind when unexpected costs arise.
At Hodge we believe financial well-being goes beyond pounds and pence – it’s about helping you feel confident, supported and in control of your finances. If you’d like to learn more about managing your finances or explore how we can support your savings journey find more help on our savings page and support hub.