The Connection Between Self-Worth and Net-Worth
Self-worth is one of the most important factors shaping how we navigate our personal and financial lives. In a world that glorifies wealth and the rich—it’s easy to feel like your value is tied to your financial status. In fact, your sense of self-worth influences many of your financial decisions.
But the truth is, your worth as a person is not defined by the numbers in your bank account or the designer brands you wear and the connection between self-worth and net-worth can be much more complex than you realize.
Healing your relationship with money means developing a healthy sense of self-worth to create lasting change in your financial life.
What is self worth?
Self worth refers to how you view yourself and your own importance as a person. It’s the intrinsic value you place on yourself.
It is independent of external factors like wealth, personal achievements, or possessions as well as the opinions of others.
However, in our society, we often link a person’s worth to their financial status, career achievements or material wealth (i.e. their money).
For example, how many times have you seen a woman wearing expensive jewelry, designer clothes, driving a luxury car or talking about a Caribbean vacation and thought “Wow, if I had that kind of money I would… be happier, take better care of my health or finally be able to save for retirement?”
We automatically make assumptions about someone based on how we perceive their financial situation.
How does society connect self-worth and net-worth?
Western society idolizes the rich. From influencers showcasing their million-dollar lifestyle to Jeff Bezos to Elon Musk, the message is pretty clear more money = more worth.
What’s more, advertisers are highly skilled at making us feel inadequate if we don’t have the latest skin care product/fashion trends/iPhone model/luxury vacation. They make money off of convincing us that we are missing something from our lives and we’ll feel complete with their product.
These messages all converge to make us feel inferior with our current lives and feel like all of our life’s problems would disappear ‘If only I had some more money’.
But the simple truth is this: your value as a human does not change based on the money in your bank account.
Whether you have a negative net-worth or a million-dollar net-worth your value as a person does not change. What’s more, your perceived value as a person doesn’t change either! If you won $1 million in the lottery tomorrow, you would be happy, but your sense of self-worth wouldn’t change. People *think* they will feel better when they have more money, but in reality this isn’t true.
How does self-worth affect your spending habits?
Your feelings of self-worth are inextricably tied to spending habits. Whether it’s spending in excess, not seeking out opportunities for financial growth or using spending as a crutch for managing negative feelings, having a healthy sense of self-worth will invariably help your financial situation.
Here are some examples of how your self-worth could impact your spending habits:
Emotional spending
Low self-worth: you spend on luxury or high-end products to feel like you “fit in” or prove your worth to others.
Healthy self-worth: You buy things because they genuinely add value to your life, not to seek validation from others.
Note: Both of these people could be purchasing the *same product*, it’s the reason behind their purchase that is linked to self-worth.
Spending on yourself
Low self-worth: you avoid spending money on yourself because you think you don’t deserve “nice things”.
Healthy self-worth: you recognize that investing money into your health, well-being, or hobbies is a valuable way to spend your money.
Financial growth
Low self-worth: you avoid looking at your money because you feel like you’re bad with money or incapable of managing your money.
Healthy self-worth: you feel confident with your money, knowing that you may make mistakes but you are constantly learning and improving.
Impulse buying
Low self-worth: you’re prone to making impulse purchases when in a certain emotional state. You may impulse buy when feeling inadequate or unworthy so as to distract yourself from those feelings.
Healthy self-worth: you pause to reflect before making a purchase to ensure it aligns with your personal goals and values. If it does not, you have no problem letting it go.
Breaking the cycle
But there’s good news! You can break the cycle between self-worth and net-worth. Not only will YOU feel happier and more self-confident but so will your money.
When you have a healthy self-worth, you make better spending choices and learn to invest in yourself and your future.
First, before making ANY purchase, ask yourself “Why am I buying this?” and “What is my current emotional state?”
Example 1: you’re buying some yogurt at the grocery store.
Why am I buying this?
Because I need food for breakfast and I like eating yogurt.
What is my current emotional state?
I’m tired and a little stressed about work.
Result: buy yogurt.
Example 2: you’re at the mall buying a new pair of shoes.
Why am I buying this?
They’re so cute!
What is my current emotional state?
Super stressed about my job. I heard rumors they’re doing layoffs.
Result: You’re seeking a hit of dopamine to feel better about your stress. Don’t buy the shoes.
Recognizing your emotional head-space before making purchases is an important first step. There are SO many reasons we buy things beyond “I want it” or “I need it” and taking a moment to pause before purchasing is a huge help.
However, most importantly, if you have low self-worth you should consider speaking with a therapist. Not only will it help to heal your mental health, but the upfront cost of therapy will pay for itself 10x over when your healthy self-worth helps get your finances on track!
Action steps
1. Reflect on your money beliefs.
Ask yourself: what do I believe and value when it comes to money? Am I spending in alignment with those beliefs?
2. Separate self-worth and net-worth.
Remind yourself that your value as a person has nothing to do with your bank account.
3. Set small, achievable goals.
Setting small, easily achievable goals is a great way to build your confidence with money. Create a savings goal or make a realistic budget.
4. Seek professional help.
Low self-esteem won’t be solved by creating a good budget. Consider working with a therapist to address underlying issues.
Your life may not be perfect, but it is imperfectly yours. The only way to live it is your way.
Katherine, founder of Imperfect Budget
Imperfect Budget is an educational platform built to help women align financial goals and free themselves from limiting money mindsets.
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