Financial security is about more than what your bank balance shows. Money has a huge impact on our overall well-being, and that includes our mental health, too. But much like how body dysmorphia distorts the way you might see your physical appearance, money dysmorphia can affect how you perceive your financial reality.
Remitly is here to help you thrive financially, and that usually starts by taking a realistic view of your finances. In this article, we explore what this unique phenomenon really is and how it may be giving you a false impression of your financial health. We’ll also look at how to recognize common signs and the psychological and social forces driving it.
What is money dysmorphia?
Money dysmorphia is the term for a psychological occurrence where one develops an unrealistic perception of their financial situation.
This can go either way: some people think they have more funds than they do. But more often, money dysmorphia leads people to believe they’re doing worse financially than they really are.
This might make you feel anxious and insecure despite having a stable income, savings, or investments. That’s because this distorted mindset isn’t about numbers in the bank; it’s about how those numbers stack up compared to your own expectations and social norms.
Body dysmorphia: the original concept
The concept comes from body dysmorphia, where individuals fixate on perceived flaws in their appearance that are invisible to other people. Similarly, people with money dysmorphia fixate on imagined financial inadequacies.
Often, money perception issues manifest as constant comparisons with peers or online influencers who appear to be more successful. What these two forms of dysmorphia have in common is the importance placed on perception. When your self-worth is tied to an unrealistic standard, reality gets replaced by anxiety and self-doubt.
Money dysmorphia also appears to be on the rise. As the research shows, it’s becoming more common among younger generations, who tend to have less financial stability. And with flashy lifestyles now commonplace online, this phenomenon is already having real consequences for society’s short- and long-term well-being.
Modern money expectations
A recent study by Credit Karma found that 43% of Gen Z and 41% of millennials struggle with money dysmorphia. Mostly, they feel that their finances aren’t keeping up with everyone else.
Another study found that only 14% of Americans consider themselves wealthy. That’s despite the average household net worth rising 37% between 2019 and 2022.
Meanwhile, 67% of Americans now believe they would need at least $1 million USD to feel wealthy. So, despite being richer than ever, many people feel like they’re falling behind.
Money dysmorphia vs. financial hardship
It’s important to point out that money dysmorphia is different from real financial hardship. We all get stressed when we lose a job, carry a lot of debt, or struggle to pay bills. So, it’s normal to feel uncomfortable and even anxious if your money doesn’t stretch far enough.
Money dysmorphia, on the other hand, exists independently of how much money you have. A person can have a comfortable salary, a healthy level of savings, and no debt, but still live in constant fear of not having enough.
This disconnect does more than just create unnecessary emotional strain; it can also lead to negative financial behaviors, such as excessive saving or under-spending, a reluctance to invest, or burnout from overworking.
Common signs of money dysmorphia
Does someone you know have money dysmorphia? Are you suffering from it yourself? Recognizing the signs is the first step toward determining whether your financial reality might be distorted.
Since money dysmorphia creates a sense of insecurity even in those who are doing well financially, it can be difficult to identify. Let’s take a look at some of the most common indicators that show your money perception doesn’t align with your actual net worth.
Constantly feeling broke
Feeling poor, even when your savings, income, and budgeting habits are strong, is one of the clearest signs of money dysmorphia. You might have a stable job with a good salary and a healthy bank account, but still feel like you’re falling behind or barely scraping by.
This can lead to unnecessary guilt or fear when making everyday financial decisions. It can also make you more hesitant to invest, which in turn harms your financial future. That’s why experts say money dysmorphia can sometimes become a self-fulfilling prophecy.
Obsessively checking financial statements
It’s crucial to stay on top of your financial situation. But there’s usually no need to check your bank accounts multiple times a day. Constantly checking deposit or savings statements, investments, and other indicators of financial well-being reflects anxiety about your economic situation.
Avoiding social activities
Sometimes, having a skewed perception of your financial health can quickly become an unhealthy obsession with saving money. This can lead to avoiding social activities that you used to enjoy, as you believe you’re unable to afford them. While living within your means is key, it’s also important to maintain connections with friends and family. People with money dysmorphia often neglect this.
Anxiety about spending
Having money dysmorphia makes it hard to spend money, even when you need to, say on necessities like groceries or healthcare. But the fear of running out of money can force you to reduce spending, whether it’s necessary or not.
Constant comparison
Many people habitually compare their financial situation to others. It might be your neighbors, friends from college, or social media influencers. This often leads to feelings of inadequacy and self-judgment.
Physical symptoms
Persistent financial anxiety can manifest as stress, insomnia, headaches, or even panic attacks. These physical symptoms steadily erode your mental health, reinforcing the cycle of insecurity.
What causes money dysmorphia?
Money dysmorphia doesn’t appear out of the blue. Instead, it’s a result of deeply rooted psychological, social, and cultural influences that affect how we perceive financial stability. Understanding these causes can help you identify where your own anxiety comes from and take steps toward financial wellness.
Social media
There’s a reason why money dysmorphia seems to affect younger people who are more active online. Constant exposure to curated online content can create a warped perception of how other people are doing financially.
Social media platforms often showcase luxury travel, designer shopping hauls, and success milestones. This can make financial comfort seem synonymous with wealth and extravagance.
Comparing your life to somebody else’s highlight reel can create a false sense of inadequacy. Over time, this comparison trap distorts your money perception, making you chase unrealistic levels of wealth.
Childhood experiences and money trauma
Our earliest experiences with money shape how we feel about it as adults. Growing up in a household with financial instability or scarcity can create a sense of chronic fear around money.
A child who grew up poor can often carry these emotional patterns into adulthood, even after achieving financial security. After all, it’s hard to shake the habits we develop early in life, and that includes our feelings about money.
Poor financial education
Many people were never taught about budgeting, saving, and investing. And without that knowledge, it’s easy to feel uncertain about how much money is really enough. This lack of confidence can fuel anxiety and lead to a constant feeling of falling short.
Media influence
It’s pretty well established that humans have a negativity bias. In other words, we tend to focus more on the negatives. That’s why the media reports far more often on bad news than good.
Endless new cycles about inflation, housing crises, rising living costs, and struggling economies can amplify financial anxiety. Even if you’re not directly affected, you may internalize the fear generated by crisis headlines.
Cultural pressure
Many societies glorify material success. Bigger homes, luxury cars, and high-status careers are positioned as something you ought to desire and as a reflection of your self-worth. Feeling that your worth is based on your bank balance feeds into money dysmorphia.
The impact on your financial and mental health
Money dysmorphia affects how you perceive and value money. But it can also change how you manage your finances, sometimes leading to counterproductive decisions.
Many people with a distorted money perception fall into extremes: over-saving out of fear of future instability or under-investing due to risk anxiety, for example. These behaviors can harm your long-term financial wellness. That’s how money dysmorphia can turn unjustified anxiety into real economic hardship.
Constant financial anxiety also takes a toll on mental health. Worrying about money all the time can lead to chronic stress, irritability, and burnout. This sour mood can also harm your relationships with friends and family, creating a cycle that’s hard to break.
People with money dysmorphia may withdraw from social events. But the effects can also be more subtle, like avoiding salary negotiations at work or declining promotions that involve perceived financial risks. You might also be less likely to start a new business or launch a new career—actions that generally lead to greater success in the long term.
Money dysmorphia is about more than money. As you can see, it can affect multiple aspects of your life, impacting relationships, confidence, and mental health.
Breaking free from money dysmorphia
Because money dysmorphia isn’t necessarily based on how much cash you have, it can’t be solved by earning or saving more. The goal isn’t just to improve your finances, but to rebuild a healthy relationship with money rooted in reality, not fear.
Here’s how to start.
Step 1 – Build financial awareness
First, you need to understand where you really stand financially. Use budgeting tools or simple spreadsheets to track income, expenses, debts, and savings. Calculating your net worth, that is, what you own minus what you owe, can help you ground your money perception in facts.
Similarly, assessing your spending patterns ensures you’ll see where your money actually goes, reducing anxiety. Try to set realistic financial goals that reflect your circumstances instead of the lifestyles you see on social media.
Step 2 – Develop healthy money habits
Adopting healthy habits can help you learn how to overcome financial anxiety. For example, start building an emergency fund to cushion you from unexpected expenses. And, if possible, consider automating your savings and investments. That will reduce the pressure of having to make weighty decisions every day.
Step 3 – Addressing the psychological aspects
Money dysmorphia is as psychological as it is financial. This means it’s essential to tackle the mental side of things to build a healthier financial outlook. Start by limiting your exposure to social media accounts that trigger financial anxiety. You can adopt daily gratitude practices to shift your focus away from scarcity and onto opportunity. But if your fears feel overwhelming, consider talking to a therapist who can help you explore your harmful feelings around money.
Take control of your financial reality today
Money dysmorphia is a growing problem, fueled in part by social media that encourages excessive comparison with others. While there have always been people who feel pressure to keep up financially with those around them, the internet has exposed us to a tidal wave of unattainable lifestyles.
Building a healthy relationship with money is a gradual process. You need to be patient and compassionate with yourself, and understand that your fears may not be based in reality.
Start with small steps like creating an accurate budget or limiting your social media exposure. Remember, the only way you should compete is by trying to be better than you were yesterday.
Frequently Asked Questions (FAQs)
How do I know if I have money dysmorphia or legitimate financial concerns?
Legitimate financial stress is caused by real challenges like debt, low income, or job loss. However, money dysmorphia comes from distorted perceptions about your financial health. To assess your true situation, review the hard data. Look at your income, expenses, debt-to-income ratio, and savings rate, rather than relying on emotion or comparison.
Can money dysmorphia affect wealthy people, too?
Absolutely. Because money dysmorphia is about perception rather than reality, even high earners can feel broke when they constantly compare themselves to those who have more. Many professionals with six-figure incomes report financial anxiety.
Is money dysmorphia a recognized mental health condition?
Money dysmorphia is not an official diagnosis. But psychological patterns of distorted thinking, comparison, and chronic financial anxiety are very real. Often, it overlaps with anxiety disorders and perfectionism. It can be effectively managed through therapy and cognitive behavioral strategies.
How can I help a friend or family member with money dysmorphia?
Provide empathy without judgement. Encourage open discussions about money instead of reinforcing fear or comparison. Suggest tools like budgeting apps or financial counseling. You can also recommend professional help if financial anxiety starts interfering with daily life or relationships.