Money and Self-Esteem – It Makes No Sense to Put Your Dollars Where Your Heart Is

If you link your self-esteem with money, this blog post is the perfect avenue to sever this counterproductive connection. 

How many times have you overheard people say they feel like they've "really made it" when they've earned enough money to buy their first house? 

Or that they feel worthy of respect in their community because of the lucrative position they hold at work?

And how many times have you had your own senses of self-worth and accomplishment tied up with your financial success?

So often our sense of self—how we think about ourselves, and how we feel about ourselves—can be so closely wrapped up with how much money we make or how much stuff we own.

We think: if I can just make X amount of dollars, then I'll finally feel good about myself. If I can just buy Y things, then I'll finally be happy and radiate confidence.

But if you're holding your confidence, happiness, and sense of worthiness hostage until you get a certain salary or purchase a certain car or accumulate a particular amount through investments, I can guarantee you're always going to feel like there's something wrong with you because you never hit that arbitrary goalpost. 

You're always going to feel anxious or depressed because you're constantly measuring yourself by that whimsical and moving goal / gold standard, especially when you fall short.

How Women Destructively Connect Money Earned to Self-Esteem

Women are always hard on themselves, but when it comes to money, they're really hard on themselves.

Women tend to let their self-esteem become affected by how much money they earn, what kind of car they drive, the clothes they wear, and whether they can pay for their kids' dance classes.

Women tend to have a much greater emotional tie to their finances than men do.

Women tend to be more connected emotionally to money because they are taught from an early age that it is their responsibility to manage the household budget — even if they work outside the home.

Many women feel ashamed if they don't earn enough income, don't have any savings, or don't make smart financial decisions.

This shame can spiral into a deeper sense of worthlessness and depression.

Here are 5 ways how women weave an intricate pattern connecting money to their self-esteem:

1) Confusing purchasing power with innate power - Many women believe that money can buy happiness, and they obtain happiness through buying things for themselves or others.

It is a common misconception that women only shop as a form of entertainment or stress relief. In truth, shopping is a tool for self-esteem pursuit.

Women may feel better after shopping (not for long!) but are not fulfilling their true desire to feel good about themselves.

Trying to build long-term self-esteem through materialistic means is just not possible, particularly for women.

Short-term gains in self-concept are fleeting and transitory at best.

2) Falling into the downward spiral of comparison - Women often measure their self-worth in terms of money earned and possessions acquired.

They compare themselves to what they see on Instagram, TV, and billboards: images of “perfect” women who have achieved a certain lifestyle, or who reflect the unattainable realities we see in today’s society.

These unrealistic expectations can lead to many women feeling insecure about their financial situation.

Women can begin to feel more confident about themselves by not measuring themselves against what they see in society or on social media.

Instead, they should focus on their own personal accomplishments and celebrate their own strengths rather than comparing themselves with others.

3) Women are particularly vulnerable to feeling guilty when they spend money, especially on themselves - Women are conditioned to be care-givers.

From a young age, they are taught to take care of everyone around them, and that extends into their relationship with money.

Sometimes women may feel like the most unnatural thing in the world is to purchase an item according to their needs.

The idea of splurging on a pair of shoes or a new dress often feels frivolous or selfish to them. 

But it doesn't have to be that way.

When you spend money on yourself, you're investing in your own goals and desires—and that's something to celebrate!

You can think of every dollar you spend on yourself as a vote for your own self-care and personal development—and there's no price tag to reflect how valuable those things are.

4) Money represents control and greater independence - Women's self-esteem and identity are often tied to their incomes.

Women who earn more than the average income for their gender will be more likely to feel successful, independent, and in control of their lives.

They may feel that they have more choices and opportunities, and therefore a greater sense of freedom.

Women who earn less than the average income for their gender are more likely to feel as if they have less personal control over their lives.

This can have very negative consequences on a woman's self-esteem when research shows that money represents autonomy.

In contrast, when a woman is financially independent, she has the power to make decisions on her own terms and live life on her own terms, without having to worry about financial constraints.

5) Money is tied to recognition - Money is often a vehicle for recognition, and recognition can be very important to women. 

Recognition is the sense of being acknowledged or appreciated by others.

It's an essential part of success because it gives us a sense of validation that we are doing something right.

While men are more likely to value money as a status symbol, women may still similarly seek outside acclaim for their financial success to boost self-esteem.

It is gratifying, at least in the short-term, when others seem to notice their business accomplishments and financial prowess.

When women are not the breadwinners, they may try to raise self-esteem, through a form of "narcissistic extension" relishing in their partner's handsome bottom line.

In fact, any connection to a well-to-do person may temporarily fill the void of low self-esteem or to swell a sense of pride.

For example, when introducing my sister-in-law to a stranger, my mother-in-law will say her daughter's name, and add the title, "the doctor's wife."

Men, Money and Self-Esteem

Men and money are in a relationship that goes deeper than the practicalities of earning it and spending it.

Money is an expression of power: the power to earn, the power to spend, and often the power to impress.

The way men relate to money reflects their values, their self-worth, and their emotional maturity.

Here are some ways that men's relationship with money impacts their sense of self-esteem:

1. Money provides a man with a feeling of independence.

2. Money gives a man freedom from worrying about how he will provide for his family.

3. Money allows a man to take care of his family so his wife can remain at home, either by choice or necessity.

4. Money gives a man the ability to make choices like where he wants to live, what kind of car he drives and where he wants to go on vacation.

5. Money gives a man status and prestige in society, especially in a culture like ours, where people who have more money are often more highly regarded than those who don't have as much money (even though they're equally worthy human beings).

Money can enable men to feel like they are “winning” at life because they have all — at least, ostensibly.

Can Money Buy Happiness and Self-Esteem?

Money is a tool to make life easier and less worrisome. It can be used to buy things that make you happy or needed items and services. But money cannot purchase happiness. It’s a tool, not a goal.

Money is finite, happiness is not.

Money can be used up and lost, but happiness continues to grow forever.

One can charitably give away all of their money without ever giving away their happiness, but they cannot give away their happiness in order to gain more money.

Money can be given from one person to another; it is a transferable resource.

Happiness is an intrinsic resource that comes from within each individual.

When people try to share happiness with others, the sharing never subtracts from the source. The nature of happiness is that it multiplies when it’s shared with others.

Money may give some relief from life's problems; it will buy some comfort and aid in making some decisions easier, but happiness must come from within each person in order for them to enjoy life regardless of their situation or circumstances.

Happiness comes from solving problems and overcoming challenges, while money can create the illusion of having solved a problem or overcome a challenge without actually doing the work necessary to solve those problems or overcome those challenges.

Money cannot provide true fulfillment

Similarly, wealth does not translate into high self-esteem. Perhaps the converse is true — a healthy dose of self-esteem helps to grow financial coffers.

There are two interesting aspects of self-esteem that have a bearing on the relationship between wealth and self-esteem:

1. Self-esteem is normally not a function of what you have achieved or acquired in life—wealth, success, popularity, etc. It is rather a function of how much you think of yourself.

Many people with high net worth are known to suffer from low self-esteem.

2. Self-esteem has a direct bearing on your ability to earn money. People with high self-esteem tend to be more adventurous, more creative, and hence, more successful.

They are also known to make decisions that do not conform to popular opinion and therefore their actions are not constrained by popular (or peer) expectations.

This gives them the freedom to work harder and smarter than others who may be constrained by outside pressures.

Dangers of Financially Contingent Self-Worth

The danger of financially contingent self-worth is a negative psychological state in which one's financial status or material wealth becomes the primary factor in measuring one's own self-worth, social value, and overall happiness.

This way of thinking can have adverse effects on overall health, interpersonal relationships, family life, and personal achievement.

Here are seven problems with financially contingent self-worth:

1. It can lead to overspending and debt.

You might not notice, but you're likely spending more than you should because you feel the need to keep up with your friends.

You might be doing this without even realizing it, because you've made your identity dependent on how much money you have.

2. It can hurt your relationships.

Those around you will surely notice if you're making yourself miserable just to keep up with others. They'll likely try to point out that your focus on money isn't necessary, but you may refuse to listen, as it's become part of who you are.

3. It can damage your career prospects.

It's worth noting that many of those around you may be doing what they can to maintain the appearance of wealth even if they don't have it — and this can include taking unethical actions in the workplace or failing to take economically prudent steps because they're so focused on maintaining their image of wealth and success at all costs.

If you fall into this category, you may find yourself struggling in your career or perhaps even being fired for unethical behavior or poor performance.

In addition, if you're so worried about (lack of) money, your focus and concentration can easily become impaired.

4. It can foment greed.

It's difficult to define exactly what greed is, but it's clearly not a healthy attitude. The author and investor William Bernstein describes financial greed as counterproductive when it leads you to take excessive risks in the search for wealth.

In other words, if your self-worth is based on how much money you have, you'll be tempted to make risky investments to increase your net worth.

5. It can lead to poor decisions. 

As well as taking excessive risks with investments, basing your self-worth on how much money you have can also lead to a number of other poor decisions, such as taking out loans or credit cards you can't afford or spending more than you earn.

In fact, one study found that people who felt their social status was dependent on their material possessions were more likely to max out their credit cards than those who weren't so concerned about their social standing.

6. It can increase stress.

It's common to tie self-esteem to money. It's easy to fall into the trap of thinking, "I'm not worth much because I don't earn that much." But the truth is, your worth is unrelated to your paycheck.

That being said, it's normal to take pride in your work, and it can be incredibly rewarding to earn money doing something you're passionate about.

But when you think of yourself primarily as an earner—when you view yourself as someone who can only provide value in terms of dollars and cents—you set yourself up for stress.

You are a person with a million characteristics that make you a valuable member of society, and some of those characteristics include the things you do for a living.

But if you start to conflate the two—to think that your value as a human being is directly linked to how much money you make in a year—you're giving yourself far more stress than you need to carry around.

You will never think of yourself "as enough," nor will your financial ledger ever "be enough."

7. It can result in an unhealthy work-life balance.

If your identity and self-worth are tied to work and money, then it's easy to fall into the trap of working too much and spending too little time on yourself and your family.

This is especially true for people who work in high paying jobs in finance, accounting or other business areas where work hours are long and stress levels are high.

If you're unable to separate yourself from your job psychologically, chronic stress can result where less attention is given to unwinding.  

Final Words When You Connect Money and Self-Esteem

Is your self-esteem tied to money?

You're not alone! It's a common and normal phenomenon, but it can lead to stress.

Obsessing about your financial goals can be exhausting, and it's easy to get lost in the spiral of trying to reach them. Here are some tips on how to break free of that cycle.

First: Don't fall into the trap of comparing yourself. If you're looking at someone who makes more than you and comparing yourself, you're probably just going to feel worse.

It's hard not to compare ourselves with others, but it's important to remember that what you see on social media is never the whole picture and you never know what lurks behind someone else's closed doors.

Second: Make a list of things that make you happy that aren't related to money. Spending time with friends and family, making art, watching your favorite TV show—these things don't cost much or anything at all.

Remind yourself that these things are there for you even if you're struggling financially!

Third: Think about the pleasant aspects of life and talk about what you're grateful for.

When you start feeling down because of your finances, it's easy to only focus on what's wrong. Instead, try thinking and talking about what's going well!

Remembering the success stories will help you feel confident, encouraged, and motivated and weaken the connection between self-esteem and money.

Here is another kernel of wisdom: Give up cash-dependent happiness

If you think that your bank account is a direct reflection of your self-worth, then you'll never be satisfied with the balance.

Even if you have plenty of money, you will always want more. You'll think that if you could just get to $50,000, or $100,000, or a million dollars, then you would be happy.

But the reality is that seeking satisfaction in financial rewards will always leave you wanting more.

Finally, recognize non-financial accomplishments.

Financial success is just one form of success. If you don't recognize other forms of success, such as personal accomplishments and healthy relationships with loved ones, then your life perspective will be limited.

As a result, you may not feel satisfied with life outside of achieving financial goals.

You are more than your money!

Money is a tool that can help you do many amazing things and achieve many amazing goals.

But it does not define who you are, or what you're capable of!

Be kinder to yourself and engage in activities that offer self-fulfillment.

Remember, you can't put a price on your self-esteem and self-worth.