The mental health condition is where there is a disconnect between what someone feels about their personal finances and can cause anxiety and distress no matter what end of the spectrum it is.
It can also trigger panic and cause further erratic or irrational decisions around finances.
This might be feeling like you have more money than you think, which can lead to excessive overspending. The condition can also be that you are financially secure but feel as though you do not have enough cash to survive, meaning you cancel all plans to an extreme level.
Feeling as though you have more money than you do can lead to huge debts racked up on credit cards and maximising multiple overdrafts.
The causes of money dysmorphia can range from uncertainty over the cost-of-living crisis leading to panic saving, where every penny from your earnings is put into a savings account, according to Hodge Bank.
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Another reason you may have Money Dysmorphia is depending on upbringing and how your parents handled money. Their attitudes towards money – either positive or negative – can be passed down to heavily influence your adulthood, the bank finds.
A third possibility that can trigger Money Dysmorphia is a previous traumatic experience with finances which has perhaps not been addressed, the bank finds.
Following the rise in curiosity over the condition, Christie Cook, finance expert from Hodge Bank, said it is important that everyone tracks their spending and key expenditure habits.
‘Don’t compare your financial situation’
Cook said: “Tracking your spending, and making note of key spending habits, will help you realise that 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.”
She added: “One of the best things that you can do is 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.”
The bank’s expert also provided three tell-tale signs as to whether someone has the condition.
Tell-tale signs of money dysmorphia
1. 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.
2. 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.
3. 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.