How to Handle Your ‘Money Dysmorphia’


Do you constantly feel broke, even when your bank account is healthy? Do you obsess over minor purchases, even when you can afford them? If your perception of your own financial situation doesn’t match reality, you may have a sort of “money dysmorphia.” It’s not an official diagnosis, but a trendy term to describe a general disconnection between our thoughts about money and our actual behaviors. I spoke with financial therapist Lindsay Bryan-Podvin to better understand what warps our perception of our finances, and what we can do to bridge that gap between perception and reality. 

What is money dysmorphia?

First off, Bryan-Podvin points out that “a more accurate term here would be ‘cognitive dissonance,’” or the distance between the way you perceive yourself and the way that you actually behave. Perhaps you think of yourself as a frugal saver, but an examination of your last bank statement would show a lot of unnecessary takeout orders. Or on the flip side, Bryan-Podvin gives the example of people who set lofty New Year’s resolutions, only to doom themselves to disappointment when they can’t save $1,000 by Jan. 31. In her financial therapy practice, Bryan-Podvin has noticed that the kind of person who struggles most with this are perfectionists. Paralyzed by a fear of failure, they never let themselves implement the changes they know they want to make. If this sounds like you, let’s look at some tips for what you can do to cope.

What to do if you have money dysmorphia

Bryan-Podvin gives this sample exercise: Take a piece of paper. On one end, write down your goals: Where do you want to be financially? On the other end of the paper, write down where you are now. Now, your task is to bridge the gap between these two points. Create a timeline: What different goalposts will help you connect these dots? For instance, say you want to save $5,000 in an emergency fund. Your closest goalpost may be to save $50, then $100, and so on. On top of these goals, what behaviors do you need to implement in order to save those amounts? Maybe it’s ordering fewer Lyfts, or learning how to meal prep

Here are some more concrete tips to bridge the gap between where you want to be and where you are now. 

  • Track your spending in detail. Keep a log of every expense for 1-2 months to get an accurate view of where your money is going. See exactly how much is being spent on needs versus wants. This gives you concrete data to counter the feeling that you’re broke.

  • Automate saving and investing. Set up automatic transfers from each paycheck into savings and investment accounts. Get to the point where you can build longer-term wealth you can see growing.

  • Cancel unnecessary expenses. Examine recurring costs for subscriptions, memberships, and services you rarely use. Trim expenses that don’t provide much value.

  • Avoid social comparison. Don’t measure your financial progress against others. Stay focused on your own goals and needs.

  • Celebrate financial wins. Note milestones like paying off a debt, reaching a savings target, or making wise investments. Give yourself credit.

  • Find balance. Allow reasonable, affordable treats without guilt. Monitor excessive financial anxiety. Don’t let money control your life.

Finally, Bryan-Podvin emphasizes the importance of accountability. As I’ve previously covered, we’re not as immune to financial peer pressure as we like to think. “Saying your goals aloud to people whose opinions you value makes a huge difference,” Bryan-Podvin says. People don’t need to share your exact spending habits in order to respect your budget and your boundaries; real friends will gladly partake in cheaper alternatives with you.

If you find yourself struggling, seek support. Reach out to a financial therapist like Bryan-Podvin. With time, a money dysmorphia mindset can be retrained. The right strategies and professional support can help your perceptions align better with financial reality.

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