Wealthy but don't feel it? You may have money dysmorphia

Telegraph

21-04-2025

Keeping up with the Joneses looks a little different nowadays. With the constant stream of lavish lifestyles on display and an increasing cost of living, it's easier than ever to feel that you're struggling financially – even when your bank balance says differently.
And there's a name for that: money dysmorphia.
The term, while not a proper medical diagnosis, has been circulating as a way to describe people's often-complicated relationship with money.
At its core, it describes a disconnect between someone's financial reality and their perception of their wealth and finances – they are rich but they don't feel it. This can cause excessive panic around finances, triggering anxiety and distress when it comes to spending which could contribute towards irrational financial behaviours and actions.
Some may dismiss money dysmorphia as pseudoscience, but the term has struck a chord. We all know someone who fixates on money despite having more than enough, or maybe that someone is you.
Paul Dutton, a 63-year-old retired management consultant, has always been financially responsible. 'We've always been, not frugal, exactly, but we've never run up credit card debt or needed to borrow large sums,' he says.
Dutton lives in Chester with his wife, two dogs, and has two adult children who are financially independent. He owns a second home in Greece and has a fixed annual income of £70,000 drawn from his pension and interest and dividends from investments.
Yet, despite his financial security, his recent retirement brought an unexpected challenge: money dysmorphia.
'It feels strange to be on a fixed income and to realise I won't see a salary increase in the next few years,' he says.
Before retiring, Dutton withdrew £100,000 annually from his consultancy business.
'I tend to think I'm worse off now, but in reality, I'm not. I'm saving less, but that's fine – I have enough savings,' he says.
'Recently, in a conversation, someone used the phrase 'asset rich, cash poor,' and I sometimes wonder whether I'm that. But then I sat down and thought that's absolute rubbish. I am asset rich, but I'm not particularly cash poor either.'
Dutton attributes his money dysmorphia to the psychological shift from working to retirement.
'I do feel I'm at a funny transitional point in life, and I'm exhibiting behaviours that I probably didn't exhibit before around finances, around spending.'
People's emotions and feelings heavily influence their financial decisions, explains Alex Pugh, a chartered financial planner at Saltus. 'From that perspective, money dysmorphia is absolutely real.'
The Saltus Wealth Index, a survey of 2,000 individuals with at least £250,000 in investable assets, found that 35pc of men and 40pc of women feel anxious about their finances. Searches for 'money dysmorphia' have also climbed 136pc in the past year.
Those who accumulate wealth after growing up without it are particularly vulnerable to this scarcity mindset. A 2022 study by polling firm Redfield & Wilton Strategies found that nearly a quarter of Britons earning over £100,000 per year still identified as 'working class'.
Growing up in a low-income household in Durham, Beth Fuller, 28, was the first generation in her family to attend university. She graduated during the pandemic and landed a part-time role in advertising, earning £16,000.
As she climbed the career ladder and changed industry, her salary increased to £40,000, then £50,000 – all while balancing new motherhood.
Fuller is self-employed and now works in social media, and pays herself £55,000 after tax.
'I haven't done it long enough to see a full year-over-year picture,' she says. 'So I'm being very cautious with how much I take out.'
For many, legitimate financial concerns, like the rising costs of housing and childcare, make it harder to reach the money milestones of previous generations and feel the same level of comfort. Fuller has been chasing that feeling of stability.
'It was simple things: a home in an area with good schools, enough space for two kids to have their own rooms, an annual holiday, and a comfortably furnished home,' she says. 'But when you break it down, achieving even these basics requires a significant income.'
Financial anxiety often isn't about the actual amount in the bank, it's about the feelings of uncertainty that surrounds it.
Despite earning more than ever before, Fuller admits, 'It becomes hard to think of my income with a sense of stability around it.' She adds: 'I wonder if I'm ever going to feel it because I think it's actually more about my perception.'
In February, her business brought in over five figures in one month.
'Three or four years ago, I made £16,000 in a year,' she says Still, Fuller worries that this is all temporary – that the bubble could pop at any moment.
She tends to prefer paying for things monthly, even with interest, rather than buying them outright, despite having the money to do so. The one area where she doesn't hesitate to spend is on her daughter.
'I'd give her the world,' she says. 'So I actually have to reel in my spending there.'
While for some, an inability to spend money might seem like a good problem to have, there comes a point where action is needed.
'Sometimes people don't spend just because they choose not to,' says Pugh.
However, if you are constantly worrying about your bank balance even though you've never missed a rent payment, or are breaking out in a cold sweat after treating yourself to a nice meal, despite having plenty of savings, that could be money dysmorphia.
Those experiencing money dysmorphia might struggle to allow themselves to indulge in life's simple pleasures.
'It might hold someone back from getting a return on life,' says Pugh. That could be booking that holiday you've always wanted to go on or treating yourself to the expensive biscuits while doing the food shop.
It also goes deeper, explains Pugh. 'It might hold someone back from making decisions and being proactive. They might sit on decisions for too long.'
'I'm quite happy to spend money on others, but I'm still umming and ahhing about mine,' he says.
Last year, he told his wife he would make a decision on the purchase by the end of the year. He has a funny feeling the same conversation will be taking place again this year.