By most people’s standards, Lisa Leach is financially secure. She runs her own business, has three rental properties and lives in a farmer’s cottage rent-free with her husband and their children. She estimates that between them they bring home £70,000 to £90,000 a year.
But Leach regularly feels the pinch. Even after a financial adviser told her in clear terms that she had “nothing to worry about”, she battles with feeling as if she never has enough money.
“I found it hard to believe when the adviser said we were comfortably well off,” said Leach, 44, from Bradford in West Yorkshire. “I’ve never thought of myself like that before and still don’t really. To most people, having that conversation would be a dream come true, but I still feel skint.”
Leach, who runs the garden supply business Hardy Landscaping, could be described as money dysmorphic — a label used for those whose behaviour around and feelings towards money do not match up with their actual financial situation.
It’s not a recognised clinical condition, but therapists say that warped perceptions of money are regularly the crux of issues such as anxiety and depression. It works both ways: some sufferers have deep-set beliefs that they are better off than they are, while others have a healthy bank balance but deny themselves basic necessities.
“Money dysmorphia is simply a distorted view, so you think and behave like you have more or less than you have,” said Lesley Thomas, a Money coach. “Symptoms could be hoarding, preventing yourself from having the essentials, or massive overspending and refusing to check bank balances. Any sort of financial mismatch.”
How it affects you
Leach’s money dysmorphic habits range from her day-to-day use of charity shops and money-saving apps such as Good to Go (which offers discounted food at the end of its shelf life) to the way she makes big financial decisions. If she gets a large sum of money, for instance, she said she feels an immediate impulse to tie it up by investing it or buying another property.
Lisa Leach says she found it hard to believe an adviser who told her she was well off
“It’s harder to touch that way. I feel like it isn’t just going to dwindle away or disappear. I also regularly get this feeling of ‘oh that’s too expensive, it’s too lavish, we can’t afford that’. I might look at something nice and a bit more expensive but will always decide that it’s not worth the money,” Leach said.
“Sometimes I feel really down and depressed about my finances, it’s almost a feeling of despair. I force myself to sit down and look at a list of all my assets, which helps reinforce that my situation isn’t as bad as it feels, or actually isn’t bad at all.”
While money dysmorphia is a relatively new concept, many recognise the feelings associated with it. Google searches for the term are up 136 per cent in the UK since last year while a survey by Credit Karma, a US personal finance app, found that nearly a third of Americans said they believed they had warped perceptions when it came to money.
Katherine Waller, the co-founder of the wealth advice firm Six Degrees, thinks the mismatch stems from the way our brains work. The left side is associated with logic and numbers, while the right side is driven more by memory, emotion and creativity.
“The left side of the brain is working on how much is enough and the actual figures, so your spending is X and your wealth is Y, and you can work out that it is enough,” said Waller, whose clients are predominantly self-made entrepreneurs with an average wealth of £37 million.
“But your feelings about money come from the right side, so insecurity or fears over money are coming from a different place to the part of your brain that does the sums. That’s where the distortion comes from.”
Out of control
Laura Buhl says a dinner bill can make her sick with fear
Thomas says that those who struggle with dysmorphia can often feel a level of stress over spending or financial decisions that isn’t relative to the reality. She said: “This state of deep stress then means that people struggle to rationally think about the truth.”
Laura Buhl, who thinks she may have had money dysmorphia since she was a teenager, recognises this state of panic. While Buhl, 35, from Munich might make as much as €20,000 (£16,800) a month when her stationery businesses are booming, a €70 (£59) dinner bill can make her feel physically sick with fear and she has nightmares about losing everything.
“I can feel the stress building up within me. My heart will be pounding, I would feel scared that my card would be declined, even though logically I knew that couldn’t happen,” Buhl said.
“I would be getting increasingly panicky about the bill coming and it just doesn’t make sense. It wasn’t that I was spending hundreds and hundreds, it will happen in a normal place when I’m just out with my family.”
Buhl thinks she has had money dysmorphia for years, but in a different way. She said it’s like a pendulum — it isn’t about the actual numbers in your account — and the distorted reality can swing both ways.
For example, in her late teens she travelled through Australia and southeast Asia with little to her name, but felt and acted as if she had thousands to splurge.
She said: “I always just felt like I had lots of money, even though it wasn’t true. I spent $400 on hair extensions even though I only had $1,500 in my account, but I was totally relaxed.
“In the end I got caught out. I was stranded on an island in the Philippines because I had nothing in my account — I had to borrow money from a stranger. It was a false sense of financial security, my perception of money was completely distorted.”
• Natalie Cassidy: What are people saving for? You could get run over tomorrow
As a new phenomenon, there’s no research into the causes of money dysmorphia, but Kamalyn Kaur, a psychotherapist in Glasgow, said: “Your family’s level of wealth growing up certainly plays a part, as do the social and cultural pressures around it and how it is spoken about.
“Some parents might glorify wealth and luxury while others might talk about spending too much money as frivolous, and that will all play a part.”
You may reject your parents’ behaviours or copy them entirely, but the idea is that the beliefs you form as a child inform your money behaviours today.
How to tackle it
Robin Dhara from north London has spent years working on his relationship with money and wondering where his issues stem from. He first realised he had a problem a decade ago when the accountant for his first company called him and said: “Do you have any idea how much money you are spending?”
“It was a horrendous amount. You have a company card and you don’t think about the lunches and dinners and drinks and cabs. It was then that I realised I didn’t know how to manage my finances,” said Dhara, 43. “I had no idea of the hole we were in. I thought it was quite healthy.”
While his life was glamorous on the outside, behind the scenes Dhara had built up piles of personal debt. In the end, he went bankrupt and closed his business.
Robin Dhara thinks his childhood and cultural pressures are part of his money problems
“I tried so hard not to go bankrupt but I felt like I’d fallen off a mountain and had no idea how to climb back up. It was a very depressing time in my life, I’m not proud of it,” said Dhara, who now runs a successful PR company. “I’m a bit more humbled, tempered and open-minded.”
He thinks his childhood and cultural pressures are part of the root of his money problems. He remembers his family keeping up appearances and although he learnt that it was important to make money, he never learnt how to keep it.
“If you have Asian parents who come to the UK, you are either a doctor, lawyer, engineer or a failure — and I was nothing. I wanted to be an entrepreneur,” said Dhara, who now feels as if he has his money issues in check. “I think because I’d branched out, I was trying not to live up to that failure part. Back then, I was spending to live the life and have approval.”
• Try our personal budget planner
Kaur has four main suggestions for those trying to manage money dysmorphia: track your finances objectively; challenge negative money beliefs or emotions; set realistic financial goals and limit your comparisons to others.
“Burying your head in the sand never works,” she said. “Whenever you have a guilt or fear of spending, challenge it and look for facts or evidence. Break your big goals into small, achievable steps and stay in your own lane. Just focus on your own progress, live within your means and you will break the cycle.”
Using some of these tactics helped Buhl. She used journals to improve her self-awareness, which helped her recognise emotional responses to money and to track her feelings. She later built successful businesses centered on guided journals.
“I would recommend to track things and reflect as much as possible. Ask yourself, is this real reality, or is this an emotion?” Buhl said.
“I still have those feelings of panic and fear, but I can recognise them very quickly now. The more you notice that your feelings are not based on reality, the more suspicious you get and the less you fall into that trap.”
