A few years ago, scientists dove head-first into the relationship between self-worth and net worth, specifically looking to determine whether people who tied their self-worth to financial success were happier than those who separated the two.
The study, published in Sage Journals, showcased how people who base their self-worth on money are likelier to experience loneliness and social isolation than those with other sources of self-worth.
We need to rethink our relationship with money.
Self-Worth vs Net Worth
Some people base their self-worth on how much money they have in their bank accounts. They think they’re worthless if they don’t drive fancy cars and have fat wallets.
Why is society obsessed with money despite evidence showing that it’s not the key to happiness?
It’s a complex riddle with answers rooted in psychology, philosophy, and the very building blocks of society.
Though I can’t hope to provide a full answer to such a complicated question, I can provide a few simplified reasons as to why it happens.
Psychological and Societal Reasons Self Worth Equals Net Worth
Many of the reasons we struggle with self-worth vs. net worth come from the complex interplay between societal and personal values. Society creates ideas and expectations that become so ingrained in our psyches that it’s nearly impossible to tell the difference between a societal problem and a psychological one.
Although I’m not a psychologist, I am a certified life coach who has studied the impacts societal expectations have on happiness, and I can see why people would struggle to separate these two ideas.
Society itself promotes the idea that your net worth equates to your self-worth, and our psychologies reinforce it. Here are some of the main reasons we get it wrong:
- Just World Fallacy
- Gender Roles and Relationships
- Needing Money to Survive
- Celebrating Wealth as Success
Just World Fallacy
A psychological reason why we equate financial success to self-worth relates to the just world fallacy.
The fallacy makes people believe that success equals worthiness because if good things happen to good people and good things happen to them, they must be good.
As the study shows, the problem with that thought process is that it doesn’t actually lead to happiness.
The just world fallacy is, in fact, a fallacy. Bad things happen to good people, and the worst people we know often win at life. Financial success can quickly turn into financial ruin.
If you’re basing your entire sense of self-worth on the whims of the stock market, an employer, or anything else outside your immediate control, you’re giving that thing way too much power over you.
Gender Roles and Relationships
Men are more likely to equate their self-worth to net worth than women due to the way societal expectations are intertwined with psychology.
The idea that men must provide is so pervasive that it’s basically engrained into our psyche. A man who can’t provide (ie – has no money) is worthless, and no woman wants a relationship with a worthless man.
It’s no wonder men only feel a sense of self-worth if they have high net worths!
These outdated gender expectations date to a time when women weren’t allowed to work and relied on a man’s income for survival. Though that’s no longer the case, many people (of all genders) still hold onto the idea. Some women won’t date a man who doesn’t have a high income, while some men think tossing money at women will lead to a successful relationship.
On the plus side, society is slowly adapting, and we’re collectively outgrowing these dated ideas.
Money to Survive
Everything we need in life costs money. Our society demands it. If we can’t survive, we can’t even think about self-worth.
The relationship between money, self-worth, and survival is related to Abraham Maslow’s hierarchy of needs. Our basic needs rest at the bottom of the pyramid, and in today’s society, we need money to meet those needs.
Things like respect, love, community, and everything else we need for self-worth don’t cost money, but because they are on higher levels of the pyramid, we can’t even think about them until our basic needs are met.
We must relate our worth to our financial success because we can’t survive if we don’t.
However, there’s a massive difference between having the financial ability to survive and equating your entire sense of self to the number in your bank account.
Celebrating Success
Society promotes the idea that self-worth comes from net worth beyond basic survival by celebrating financial success as the epitome of success.
We worship professionals who make a lot of money instead of professionals who impact the world. We’re obsessed with rich and famous celebrities, fawn over doctors, and allow wealthy elites to get away with nearly anything. In the meantime, we deride teachers, tell emergency workers they should “get better jobs,” and scoff at stay-at-home parents who raise the next generation.
Collectively, we’ve defined success as financial success and ignore every other type of success.
Why Self-Worth Transcends Net Worth
Self-worth is more important to happiness than net worth. The study proves it.
Self-worth allows people to feel good about themselves without relying on external factors. It’s crucial because people with high self-worth tend to have confidence and self-esteem while living happier lives.
Net worth is an external factor; it’s not intrinsic to who you are as a person. A stock market collapse or natural disaster could wipe it all out, and there’s nothing you can do to change it. When you tie your self-worth to external factors like net worth, career, or relationship status, you’re doing yourself a massive disservice.
Self-worth should be intrinsic. We all have value as human beings for who we are inside rather than what we have on the outside. Having an internal locus of self-worth allows us to preserve ourselves even when life throws us massive curveballs.
Our society’s emphasis on financial success as a measure of self-worth harms people.
How Do We Change Things?
How do we mitigate this self-worth vs. net worth dichotomy when everything in our lives tells us that money equals success and happiness?
Be the change you want to see. Stop basing your worthiness on your financial success.
I know it’s difficult to change your entire worldview, but difficult doesn’t mean impossible. Start by speaking to a therapist who can help you discover your inherent value outside of what you own. Work to dismantle the systems that trapped you in a life that doesn’t work for you.
Next, try to relate to people on a human level, not based on their material goods. Stop judging people on what they do for a living, what car they drive, how they dress, and what neighborhood they live in. Instead, look at how they treat others, how they impact the world around them, and their values.
Finally, examine your biases. Do you think the way you do because of facts or because of insidious societal expectations you learned as a child? Identifying those biases takes hard work and introspection, but it’s worth the effort to craft an unbreakable sense of self-worth based on your human value.
Your Net Worth Isn’t Your Self-Worth
I don’t care how many zeros you have in your bank account. That doesn’t define your value.
You are a human being and have worth no matter what the bank account or credit reporting agency days. You don’t need a fat bank account to be a good person.
I was making what was big money for me the last three years I worked. My last year I made 24 times my first years pay. I felt rich. But I also realized I had invested enough that there was no need keep working a job I had stopped loving. So I retired years earlier than I had planned. That was five years ago, and my good life has only gotten better. I’m fact I turned down an offer of twice what I used to make just to stay retired. I used to see myself as my job, now I see myself as husband, dad and friend. I really like this guy I’ve become. Money isn’t so important to him.