A few weeks ago, I went to my best friend’s birthday dinner at an upmarket restaurant. I knew I’d be spending more than usual, but watching the money leave my account left me anxious; I kept checking my balance, counting the days until my next pay cheque. Then, as soon as I got paid, those pricey jeans I ‘couldn’t afford’ just days ago (and were triple the cost of dinner) suddenly didn’t seem so expensive after all. But two days later, I was stressed over rent again. And even though I have savings, my brain was stuck with uncertainty: Am I actually on the verge of being broke, or is my financial situation completely fine?

I know I’m not alone. Many people experience this constant tug-of-war between financial reality and perception – something experts call ‘money dysmorphia’. It can cause excessive panic about finances, leading to anxiety, distress and irrational financial behaviours.

Christie Cook, finance expert at Hodge Bank, explains: “Those who suffer from money dysmorphia can develop extremely unhealthy spending habits. Some people overspend, believing they have more money than they do. This can lead to racking up debt on credit cards and overdrafts, potentially putting them in financial difficulty. On the other hand, some may become overly frugal, feeling the need to make drastic cutbacks.”

She highlights social media as one of the main triggers: “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.”

So, it’s hardly surprising that after my daily Instagram scroll, I feel like I can either spend like a celebrity or think that whatever I have in my account is simply not enough to get by on. And it’s no wonder: one US study found that 27% of consumers felt less satisfied with their money due to social media comparisons, a key driver of money dysmorphia.

It’s a growing concern in the UK. According to Cook, several factors contribute to money dysmorphia, including the cost of living crisis, childhood financial environment and past financial trauma. “Growing up around people, such as parents, who suffered financial hardship can shape attitudes into adulthood. It’s important to recognise your own worth and how your financial situation is different.”

She also notes that personal financial history plays a role: “If you’ve experienced bankruptcy or financial 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.”

“The most obvious sign of money dysmorphia is excessive worry about finances when there’s no immediate threat, such as losing assets or going bankrupt,” Cook explains. “If checking your bank balance causes stress or panic, or you feel guilty about how much you earn or save, these could be signs.”

She also highlights emotional responses as key indicators. Self-sabotaging behaviours or extreme mood swings related to money are common symptoms. Cook gives an example of an unexpected expense – like a parking fine – that has the capacity to ruin your entire week, even when you can afford to pay it. She adds: “These excessive emotional reactions to money are a major trait of money dysmorphia.”

The reassuring news is that there are steps you can take to free yourself from money dysmorphia.

Track your spending

Cook recommends keeping a close eye on your spending habits: “Tracking your expenses helps you recognise if you’re overspending and need to rein it in. You might even realise you have more flexibility than you thought.”

Stop comparing yourself to others on social media

“Don’t compare your financial situation to others. Benchmarking yourself against influencers or high-earning friends can distort your own financial reality. Focus on your own financial journey,” Cook says.

Use saving pots

Having separate savings for different purposes can help ease financial anxiety. “One of the best things you can do is set up savings pots with different goals,” says Cook. “For example, one for Christmas and another for emergencies. It helps you feel more in control of your finances and gives you peace of mind when unexpected costs arise.”

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