Is your Self-Worth tied up with Money?

According to a study by Kahneman and Deaton (2010), beyond a certain income level, individuals do not report greater happiness or satisfaction (1). Despite this research, the question still arises: Is it right or wrong to link self-worth with money? The answer isn’t as straightforward as you might think.

Understanding Self-Worth and Money

Self-worth, or self-esteem, is our perception of our value or worth as individuals (2). It’s linked to our accomplishments, the respect we command, and our ability to realize our dreams. On the other hand, money is often perceived as an objective measure of success, providing a straightforward comparison tool.

Is it Wrong?

• Focus on External Validation: Linking self-worth with money means deriving our sense of value from external validation, which can be unstable and out of our control (3). It often causes stress, anxiety, and depression.
• Shallow Understanding of Success: Defining success solely based on monetary gain presents a shallow and narrow perspective, overlooking other crucial elements like mental health, relationships, and personal growth.
• Detriment to Happiness: A meta-analysis by Howell et al. (2013) shows that prioritizing material wealth over experiences lowers happiness levels (4).

Is it Right?

• Resource to Fulfill Needs: Money can be seen as a tool to meet basic needs and live a comfortable life. In this context, it may contribute to feelings of security and success.
• Indicator of Success: Financial success might be one among many indicators of hard work and discipline, leading to a sense of accomplishment.

Balanced Perspective

Ultimately, a balanced perspective is key. Money plays a role in our lives, but it should not become the core measure of our worth. Recognizing the multi-faceted nature of success and self-worth helps us develop healthier, more sustainable attitudes towards money.

• Internal Values: Prioritize internal values like kindness, integrity, and resilience as measures of self-worth. These factors remain within our control and lead to a healthier mindset (5).
• Holistic Success: Adopt a holistic definition of success that includes personal development, relationships, and mental well-being, alongside financial stability.

In conclusion, it’s neither wholly right nor wrong to link self-worth with money.

The crucial factor is maintaining a balanced view and recognizing that money is just one aspect of our overall value as individuals.

References:

1. Kahneman, D., & Deaton, A. (2010). High income improves evaluation of life but not emotional well-being. Proceedings of the National Academy of Sciences.
2. Orth, U., Robins, R. W., & Widaman, K. F. (2012). Life-span development of self-esteem and its effects on important life outcomes. Journal of Personality and Social Psychology.
3. Twenge, J. M., & Campbell, W. K. (2002). Self-esteem and socioeconomic status: A meta-analytic review. Personality and Social Psychology Review.
4. Howell, R. T., & Hill, G. (2009). The mediators of experiential purchases: Determining the impact of psychological needs satisfaction and social comparison. The Journal of Positive Psychology.
5. Ryan, R. M., & Deci, E. L. (2001). On happiness and human potentials: A review of research on hedonic and eudaimonic well-being. Annual Review of Psychology.

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NOTE: I create some of these posts using GPT4, asking the right question until I get the response that matches what I wanted to say. And all posts created using GPT4 will carry a message like this one at the end. So, FYI please.

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