The Relationship Between Net Worth and Self-Worth

Financial security is a key part of life. It allows people to live comfortably, invest in themselves, and thrive. However, the relationship between net-worth and self-worth can become entwined, and when this happens, people can struggle to separate their identity from their bank balance. 

Self-Worth and Net Worth 

Self-worth is the innate value that people see within themselves. People with healthy self-worth are not influenced by anything outside of themselves and know they are valuable human beings regardless of their circumstances. Many people base their self-worth on external factors, such as money and success, and many psychologists say that this detracts from paying attention to the intrinsic value that every person has. 

Net worth, on the other hand, is the total value of a person’s assets. This can include properties, investment portfolios, and cars and can influence many aspects of a person’s life. It may seem more straightforward to measure worth by what people have rather than who they are, as net worth is clearly measurable by numbers; however, when self-worth and net worth become linked, any negative changes in net worth can damage self-worth. 

People with low self-worth may base their value on things such as their finances and job, and this can have negative consequences, leading people to struggle with social disconnection and relationships. 

Many negatives can arise from net worth and self-worth being linked, such as:

  • Poor mental health – having good self-worth can help to improve resilience, which helps people bounce back from challenging situations. However, when self-worth is linked to external factors such as net worth and those factors suffer or something changes, it can damage self-worth and lead to poor mental health in the face of challenging situations. 
  • An unequal work-life balance – the drive for higher net worth can lead people to work long hours and lose sight of other important things, such as family and hobbies. Not making time for rest can also lead to mental health struggles and burnout in the future.
  • Damaged relationships – people’s relationships can suffer when self-worth is connected to net worth, as they can spend more time working and obsessing over their finances than spending time with people they care about.

Self-Esteem vs Self-Worth

Self-worth and self-esteem are similar, but not the same. Self-esteem is how people think and feel about themselves, but self-worth is a broader form of self-esteem that outside factors should not influence. 

Our self-esteem is more malleable than our self-worth and can go through many highs and lows depending on our circumstances. It often relies more on external forces, such as positive or negative feedback from others, current stress levels, and general mood. 

While self-esteem can change depending on circumstances, self-worth is more consistent over time, and core beliefs of being a valuable person remain unchanged. Self-worth is also much more profound than self-esteem, so even when your self-esteem is low, your self-worth can still be high, which can help strengthen resilience and allow you to bounce back from adversity quicker. On the other hand, low self-worth can greatly impact self-esteem, which can harm mental health.

Improving Self-Worth

When self-worth and net worth are tangled up together, separating them and building a healthy sense of self-worth outside of financial status can be difficult. 

You can boost your self-worth by:

  • Not looking for external validation – the most important step in separating self-worth from net worth is not relying on external validation. Make a list of your core values, beliefs, and feelings and get in touch with what makes you happy and what brings you joy. This can help remind you that your value is more than external success and failure.
  • Being compassionate – self-compassion is vital for improving self-worth and can improve other areas of your life. When you catch yourself connecting your self-worth to your net worth, being kind to yourself can give you a boost.
  • Stopping comparisons – it is human nature to compare ourselves to others, but this can be harmful in the long run. Instead, try to find similarities. This can break the cycle of comparison and judgement and can also improve your relationships and foster healthy connections.
  • Getting off the hedonic treadmill – the hedonic treadmill is a term used to describe the tendency to continue striving for more, even after achieving significant milestones. Although people may be happy after a big promotion, this happiness wears off after a while, and people start striving for the next big thing. Stepping off the hedonic treadmill is challenging but can be done by focusing on sustainable, long-term goals and taking a step back from material goals by prioritising relationships and hobbies.

Improving self-worth can be challenging, and many difficulties can arise along the way as some may feel they cannot take time away from work or step back from their businesses. This, in turn, can lead to high levels of stress and potentially even mental health issues. 

Working hard and being successful is not inherently bad. It can become a problem, however, when your net worth and self-worth become linked with one another. 

If you are unable to separate your self-worth from your net worth, reach out to Addcounsel today. Our team is here to help.

 

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