Why the relationship between money and self-worth is so complicated

Does your bank balance determine who you see in the mirror? Research shows there’s a powerful connection between money and self-worth. But what does this mean for your mental health and bottom line?

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Defining self-worth

Self-worth is how much you value yourself and what you think about yourself. Synonymous with self-esteem, self-worth is a critical piece of the mental health puzzle. Since our self-worth determines what we think we deserve in life, it often leads to a self-fulfilling prophecy — which can either bode well or poorly for us.

How we feel about this can impact our confidence, change how we interact with our friends, and even make it hard to feel good.

The connection between self-worth and money

When you meet someone for the first time, what you do for a living comes up pretty early in the conversation, right? That’s because we’re ingrained from a very young age to equate our identity with our occupation. Your job title instantly conveys certain information about your educational background, your social status, and your bank account.

The same things tend to be out front on social media where people share successes but maybe tend to put a little extra shine on their accomplishments. You should not need to do that to feel good or build your self-esteem but the reality is many of us do.

Depending on what you do for work, you may feel either a sense of embarrassment or pride when you talk about it. This emotional response is the result of social conditioning. We’re taught to believe that some jobs are prestigious and of great value, while others are lowly and menial. Since we’ve put such a strong link between occupation and identity, and since our job is thought to be closely tied to our wealth, it’s not a shock that we’ve connected our self-worth to our financial standing.

After all, self-worth is an abstract concept. But money is not. 

It’s easy to nail down a definition of ourselves using metrics like debt total, bank balance, and annual income. But, in this case, going the easy route takes a very limited view that can be extremely damaging to your well-being.

Your relationship with money should be about your financial goals and feeling good about your choices. If you have what you need, love your job, and have found happiness, then what other people think should not matter. The reality is that it can be hard to maintain that mindset and other people can affect our emotions.

The dangers of basing your self-worth on money

When your self-worth is based on money, it’s very fragile. That’s because the way you view yourself is tied to something that can change in an instant. Getting laid off, dipping into your savings, straying from your budget, or taking on debt can hurt your financial situation, at least in the short term.

When your personal value is based on those metrics, it’s going to fluctuate along with them. This can put you on a self-worth rollercoaster, which is terrible for your mental health. For the sake of your overall wellbeing and your future, you need to shift your perception. 

How to separate your net worth from your self-worth

It’s critical for you to separate your net worth from your self-worth. To do this, you have to redefine your identity. Think about your personality and what you do regularly outside of work. Are you funny, loyal, or kind? Do you help others without thinking?

Take a full inventory here. Start describing yourself in these terms — both aloud and in your own head. Really own all of the amazing things about yourself that have nothing to do with money. Ultimately, you’ll start to base your self-worth on these positive traits.

The best part? These characteristics are enduring. You’ll still be hilarious and helpful, no matter what your bank statement says. That means, your self-worth will be stable, always trending high. So, adopt this mantra: I am more than my net worth!

How your self-worth can determine your net worth

While your self-worth is not your net worth, how you feel about yourself can impact your personal bottom line. Remember, your self-worth determines what you think you deserve in life. So, if you have a poor opinion about yourself, you won’t feel worthy of receiving wealth. Conversely, if you think highly of yourself, you’ll believe you are worthy of abundance. 

Your self-worth will make all the difference when you apply for jobs, negotiate your salary, ask for a raise, or go for a promotion. If you’re an entrepreneur, your self-worth will influence how you set your prices, how aggressively you follow up with prospects, and what boundaries you put in place with your clients.

When your self-worth is high, you’ll go for stretch opportunities, ask for more money, believe fully in your knowledge, and set appropriate boundaries. When your self-worth is low, the reverse of those things will happen. In either case, you’ll ultimately see the results, or lack thereof, in your bank account.

Money isn’t happiness

Your self-worth has a hand in determining everything about your life. While it’s easy to equate your personal value with your economic value, it’s also a surefire way to be miserable. Having and pursuing financial goals is worthwhile and to be encouraged. Just don’t let those objectives define you.

–By Laura Gariepy