Keith feels like a financial failure. Instagram fills his screen with breezy shots of influencers driving expensive cars and diving from yachts.

The Gen Zer makes six figures, has no outstanding debt, and has plenty of disposable income in his checking account, but he feels poor after scrolling through social media. Keith uses his credit card to make expensive purchases so he can soothe his feelings of insecurity and finally feel successful.

Gen Xer Cheryl also has a complicated relationship with money. Her childhood was rocked after her mother lost her job and declared bankruptcy.

Cheryl later developed a fear of losing everything. She believes buying anything new will send her into financial ruin. Her finances are in good shape, but she feels like she never has enough money and is terrified of going broke.

Although not their real names, Keith and Cheryl are real people. Their financial behaviors illustrate money dysmorphia in action. Anxiety warps how they view their finances.

Roughly 47 percent of U.S. adults say money has a negative impact on their mental health, according to Bankrate’s money and mental health survey. Money dysmorphia affects people at all income levels. Even wealthy people are affected. Here’s what money dysmorphia is and how it affects your finances.

What is money dysmorphia?

Money dysmorphia is when your perception of your financial situation doesn’t represent reality. It’s a distorted view of your finances. For example, you might believe you’re not doing well financially even though your finances are in great shape. You see dark clouds and a boat lost at sea when the reality is sunny skies and smooth sailing.

“Money dysmorphia is when someone has a highly warped sense of their financial status. They have an inaccurate reference point for what’s normal,” says Dr. Lanre Dokun, psychiatrist and founder of Healthy Minds NYC, which offers financial therapy.

“It’s having an unclear sense of one’s sense of self the same way we would see with body dysmorphia,” adds Dokun.

Although money dysmorphia is a common issue, Dokun says the term isn’t a clinical diagnosis. It’s a clever way to describe how some people experience their personal finances.

Causes of money dysmorphia

Money dysmorphia is primarily caused by comparing yourself to others – an extreme case of keeping up with the Joneses. Dokun says it’s a form of anxiety often triggered by self-comparison. Reality TV and social media don’t make the situation any easier for those struggling with this issue.

“Reality TV and social media give people an on-the-ground perspective of these lavish lifestyles,” says Dokun. “It brings you into their homes and sort of normalizes this kind of life.”

The media’s portrayal of a “normal” life is far beyond what most people can afford. This creates anxiety for some people and leads them to believe they’re failing with their finances.

It’s not uncommon to see social media influencers filming videos in million-dollar homes, taking expensive vacations  and eating dinner at Michelin-starred restaurants. Perfectly manicured nails and professionally styled hair are also the norms on most social media channels. Many people in reality, however, can barely afford groceries let alone a glam team.

Comparison isn’t the only cause of money dysmorphia. Money dysmorphia could also stem from traumatic experiences surrounding money.

“Many individuals who grew up in poverty feel a strong need to show off their wealth in adulthood,” says accredited financial counselor and certified financial fitness coach Annette Harris, owner of Harris Financial Coaching.

“They may use their money to buy expensive clothes, cars or other luxury items to make up for the lack of financial security they experienced in their youth,” adds Harris. “Alternatively, they may develop a fear of losing money and hoard it instead to ensure they never go without again.”

How money dysmorphia affects financial habits

Not everyone who experiences money dysmorphia spends less money. Some head in the other direction and overspend. This extreme could result in a self-fulfilling prophecy and lead to poor financial health.

“There are a lot of people that, because they’ve seen so much spending, think, ‘That’s how I should be spending,’” says Dokun. “So, they’re not really saving for retirement or planning for their children’s college fund, for example. Because overspending has been normalized, there are definitely people spending more than they ought to,” Dokun adds.

Money dysmorphia causes people to make financial decisions that don’t fit their situation. As Dokun and Harris explain, this could manifest as hoarding money when you have plenty of cash in your checking account or overspending to appear wealthier than you are.

Another way money dysmorphia could affect financial habits is by causing inaction. Fear becomes so crippling that you go out of your way to avoid making any financial decisions.

“The shadow that money dysmorphia casts might cause some people to freeze. They avoid making any decisions concerning money, potentially missing opportunities and remaining financially underwater,” says Erika Kullberg, attorney, personal finance expert and founder of

Who’s most affected by money dysmorphia?

Gen Z has been affected by money dysmorphia the most, largely due to the amount of social media they consume. They’re greatly influenced by media messages. A Bankrate social media study found Gen Zers (those between the ages of 18 and 26) are most likely to make an impulse buy after spending time on social media.

Money dysmorphia, however, affects people at all stages of life. Dokun says he sees many of his middle-aged clients “piling up resources” because they want to measure up to those in their age group. For them, this looks like saving enough money to send their children to the best schools and purchasing a luxury car or home.

“Each age group has its own comparison point depending on what their peers look like,” says Dokun.

How to overcome money dysmorphia and maintain a healthy financial lifestyle

 You can have a good relationship with money. Here’s how to overcome money dysmorphia and maintain financial health.

Acknowledge your financial past

It’s important to become aware of the root of your financial issues so that you can move forward. Harris recommends speaking with a mental health professional who specializes in financial therapy. Talking through your money challenges will alert you to hidden problem areas.

“Acknowledging your financial past can prevent it from affecting your future. Discussing your money fears with someone provides ways to cope with issues such as overspending or feeling the need to show off wealth,” says Harris. “It’s important to find healthy ways to manage these feelings so they don’t negatively impact your financial well-being.”

Speak with a financial advisor

Dokun advises working with a financial advisor so you can see your true financial picture. You might find that you’re doing just as well as, or better than, your peers. This can help allay fears about your financial future.

Build financial literacy

The absence of financial literacy can contribute to money dysmorphia. A strong financial foundation will prevent you from getting sidetracked by inaccurate financial information.

“Education on financial matters can relieve many fears and misconceptions,” says Kullberg. “Developing a financial plan can help you figure out where you are and what steps you need to take to maintain or improve your financial shape going forward.”

Get in the habit of building a monthly budget

Creating a monthly budget can be a powerful tool in managing money dysmorphia. It can help you gain a clear understanding of your income and expenses, and can empower you to make informed decisions about your spending and saving.

Start by listing your monthly income and expenses, identifying any areas where you can cut back, and setting savings goals. Over time, as you stick to your budget, you may find that your perception of your financial situation becomes less distorted.

Bottom line

Money dysmorphia, though not a clinical diagnosis, distorts your perception of your financial health. Acknowledging your financial past and consulting with a professional can help you view your finances accurately and make healthier decisions.

If you think you might have money dysmorphia and would like help, reach out to the Financial Therapy Association to connect with a financial therapist.