Does your bank balance match up with your day-to-day lifestyle choices?
If the answer is a definite no, this may be a sign of an issue being termed “money dysmorphia” in discussions online.
Rather than a specific medical diagnosis, the phrase has been used in online forums, podcasts and social media posts as a general term to refer to situations where there’s a significant mismatch between people’s financial reality and how they perceive their money situation and wealth.
Tinisha Graham, a money saving expert at online budgeting tool IE Hub says: “Money dysmorphia is a growing challenge, and it’s something many people are grappling with today, often without even realising it.”
– How can the issue show up in day-to-day life?
Graham explains: “It’s a reflection of the deep emotional ties we have to money – whether it’s fear of not having enough or avoiding financial truths.
“The key to overcoming it is financial self-awareness and addressing the emotional triggers that shape our beliefs about money.”
Some people may chase unattainable lifestyles, triggering irrational spending decisions – leading to anxiety, panic and distress.
Christie Cook, a finance expert from Hodge Bank says: “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.”
With a busy lifestyle, Olivia Fox, a 28-year-old from Bristol, sometimes finds herself splurging on items.
She says: “I get FOMO (fear of missing out) badly, so if I see everything else doing something, then it’s something that I also want to book there and then, no matter the price tag.”
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Fox says she has a “you only live once” mindset, adding: “I’m always busy on weekends doing things that cost money, too.”
She says she isn’t in debt, but does dip into savings for “monthly splurges,” adding: “If there’s a night out coming up, or someone’s birthday, then I won’t wear the same outfit again and I’ll have to buy something new.”
It’s not always about splashing the cash.
Some people may become more frugal than they need to be. While it’s important to have a financial buffer built up as savings, Cook says some may “panic-save”.
For some people, distorted money perceptions can have lasting impacts on their overall financial health.
Sarah Coles, head of personal finance at Hargreaves Lansdown, warns that some people may end up ditching important financial goals – or taking big risks in the hope of a quick fix.
She says: “In some cases, people will drop goals like saving for their first property or putting money into a pension, in favour of a holiday or going out with friends. These things are important too, but sacrificing your long-term goals is going to come back to bite you.
“Others will decide the only solution is to find a shortcut, which can lead them into all kinds of trouble. You might, for example, be tempted to put money you can’t afford to lose into cryptocurrencies.”
Coles adds: “Unfortunately, a get-rich-quick gamble of investing in something like cryptocurrency runs a huge risk of backfiring, so you end up losing money – and in a worse position than when you started.”
– What could be a sign of financial habits becoming a problem?
Feelings of guilt about spending or saving or that you “don’t deserve” to have money could be an issue.
For some, self-sabotage can become habit.
Cook says some people may frequently cover other people’s costs, when they can’t afford it.
Burying your head in the sand over bank balances could also be a sign you’re in denial.
Excessive emotional reactions to money may be another red flag.
This could mean a parking ticket ruining your whole week, even though you could afford to pay it, says Cook.
– How to overcome tricky relationships with finances
1. Get an objective overview
Coles suggests finding objective standards to measure yourself against.
She says: “So, for example, don’t worry over whether you have as much in savings as you expect of yourself, consider whether you have enough to cover three to six months’ worth of essential expenses.
“With pensions, you can use a pensions calculator to see if you’re on track. Finding the real gaps, instead of thinking you’re failing on all fronts, will help you prioritise.”
2. Try budgeting hacks
Cook highlights the 50-30-20 budgeting strategy – meaning putting 50% of your income towards bills, 30% towards “wants” and 20% into savings. Proportions can be varied to suit individual circumstances.
3. Practise ‘mindful spending’
Contactless payments make the checkout process very slick, but Cook suggests pausing to ask yourself: “Do I really need this item?” before making a purchase.
4. Recognise your ‘triggers’
Past experiences can have an impact on our current habits.
Parents’ attitudes towards money or financial troubles that have been overcome in the past can have a lasting influence.
Graham suggests asking yourself: “Are you truly struggling, or is this anxiety-driven?”
5. Avoid ‘comparison traps’
Graham says: “Social media can often distort our sense of financial reality by showcasing curated, idealised lifestyles. Constant exposure to this can trigger feelings of inadequacy or insecurity.”
6. Have savings goals
If spending is always about the “here and now,” you may find it easier to save for a specific longer-term goal, such as a birthday, a holiday, or even Christmas 2025.
To reinforce “good” financial behaviour, Graham suggests focusing on the positives.
She says: “Taking notes can help rewire your negative money beliefs and gradually replace them with a sense of financial control and accomplishment.”
7. Talk to loved ones
If you’re in an established relationship, it’s important to be open with a partner about money issues, not only because of the support and understanding you’ll receive, but also because their own financial situation could be affected.
8. Get support
Banks and other financial firms can offer options to people struggling with debts. Charities such as StepChange and Citizens Advice can also give support.
