Money and Self Esteem – Finding a Proper Emotional Balance

Do you feel that money and self esteem are closely tied together? That’s a very important question. All of us deserve to be happy and have a proper view of our contributions in life. Unfortunately, human beings don’t have it so easy! We are often times our own worst enemy. It’s common for people to constantly use outside measurements to determine their happiness. Money and self esteem have a very strong correlation for many people. How can you find a proper emotional balance?

money and self esteem

The Emotional Tug of War With Money

Of course, money has a very important function for all of us. Money is not bad, nor is it unimportant. It’s a tool that all of us require to make a living. Often times, it is a reflection of the fruits of our labor. Have you ever worked a job where you felt grossly underpaid? It’s frustrating when you make a significant contribution and aren’t compensated appropriately. People usually leave jobs for one of two reasons: a bad boss or a lack of fair pay.

There is so much emotion around money for all of us. You probably stress out when you are running low on it. Chances are if you have some, you have some worries about losing it. It’s normal to have some legitimate concerns surrounding money. The key is to not let fear completely shape your relationship with money. It’s also critical to not let money and self esteem become too closely linked.

Money and Self Esteem – Keeping Up With the Joneses

You probably know the phrase “keeping up with the Joneses”. That was a popular cartoon that ran for many decades in a variety of newspapers. It was about the fictional McGinis family, who were climbing the social ladder. The McGinis family made it their life’s mission to match or exceed the accomplishments of the Jones family, usually with a comedic twist. Mark Twain said this about the comic, “The outside influences are always pouring in upon us, and we are always obeying their orders and accepting their verdicts. The Smiths like the new play; the Joneses go to see it, and they copy the Smith verdict.”

The problem with the McGinis family is that there was never enough. They always felt inferior to the Joneses, so they would forever be the measuring stick. Their whole idea of self esteem became wrapped in trying to outdo the Jones family. It was all about making money, accumulating more stuff, and trying to appear more sophisticated.

It’s human nature to compare ourselves with others. Sometimes, it can be very helpful to model successful people. However, you have to make sure you keep a balance. If money and outside influences become too big of a measuring stick, it can leave you always wanting more.

Finding Your Personal Definition of Wealth

I think it’s important to properly define the meaning of wealth. Wealth refers to abundance. It may come in the form of money, but for most happy people, it comes with a deep satisfaction of life. That doesn’t mean you just sit back and have a “sunshine and lollipops” attitude about everything. You know as well as I do that life does not work that way. All of us face daily pressures and have important decisions to make. We have to earn a living, take care of our family, and honor our responsibilities.

How can you find a balance with money and self esteem? There are many ways to find a happy medium. Here are a few of the things that I have observed over the course of my career.

money and self esteem

Having a Plan For Your Money

First, you have to figure out what is really important to you. Do you have any goals surrounding your money? Most people have one money goal – to make more! If only it were that easy. Even if you make more money, you need to manage it. I cannot stress the importance of this activity. When you set goals for yourself, you get a laser focus on what you really want. It becomes less about other people, and more about your desires. The nice thing is that I find most people’s goals around money are focused on taking care of family and having more fun out of life.

After you set goals, take a greater interest in managing your money. Do you know your current net worth? Do you track your expenses? If you track it, you can manage it! I find that people who make the choice to properly manage their money become more confident. Their money doesn’t define them as much. It’s a tool to help fulfill their goals. It makes decisions around money easier. Why? Because everything comes back to your financial goals. What do you want your money to do? That is the question.

Winning the Battle With Affluenza

We see more of a movement toward minimalism. I think it’s great, in the sense that it shows people are frustrated with the “affluenza” mentality. Buying a huge house and racking up a ton of stuff is not the path to wealth. If you have the money, and you get joy out of those things, that fine! However, in my work, I have found that mentality does a lot more harm than good. I am a big believer in delayed gratification. If you can patiently save up for something you really want, it can bring so many financial benefits. It also demonstrates how important something really is to you. Sure, it easier to charge it on the credit card, but that instant gratification is very fleeting. Make sure you are very deliberate with your money.

Taking positive action with money boosts self esteem. Either you manage your money, or it manages you. It gives you a sense of control when you decide to manage your money. Does that mean everything is going to be smooth sailing? Of course not. There are very few things in life we can totally control. However when you are prepared and have a plan, it’s so much easy to manage. Make savings a priority. You know that saying “plan for a rainy day?” I promise you at some point it will rain. When you take the right steps to anticipate the financial ups and downs, you will be ready to handle what life throws at you.

Money and Self Esteem – Finding Harmony

Your value as a human being is not defined by money. Money is a tool to make a living and help enrich your life. Money and self esteem do not have to be joined at the hip! Forget keeping up with the Joneses, the Kardashians, or anyone else. If your not making enough money to make ends meet, what can you do to increase your income? I have several friends and clients who picked up side gigs while they were getting their financial house in order. It can help dig you out of a hole and get on a better foundation. It’s not easy, but they felt energized by the fact they were making serious progress with their money. Their goals helped keep the fire burning.

The Build Financial Muscle community is here to support you through your journey. Encouragement and accountability help give you the tools you need to build confidence. Building skills with money is like any other activity. We need knowledge and practice. Money and self esteem can find a beautiful harmony. Remember, you have so many gifts you bring to the table, most of which do not involve money!

4 thoughts on “Money and Self Esteem – Finding a Proper Emotional Balance”

  1. It is a tricky thing. I have had a couple of friends who were billionaires, for reals. And while they had more stuff than me by far, things like jets, private vacation compounds, even their own island in one case, they spent far less as a percent of their net worth than me or Mr. Money Mustache for that matter. So it might be they were vastly more frugal than us? Or did the fact that they had a good number of really expensive things mean they weren’t as frugal? I really don’t know what to think, but I can say they were kind, generous, warm and hard working people. And the more I was around them the more I realized they were better at life than I was, better parents, better workers, better friends and better decision makers. And maybe that’s why they had so many extra digits in their net worth column.

    1. That’s amazing – it’s so true. Money is a funny thing. So clearly a correlation in the examples you shared. I find the whole topic fascinating, and really admire people who find what seems to be a perfect balance.

  2. I really learned a lot from this article! Money and self esteem for me is really connected as we get too stressed out when it comes to money. Great post!

  3. I love this article. I agree that money and self-esteem are related to one another. Our self-esteem is low when we have limited or no money at all.

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