The pursuit of money is, in itself, not a bad thing. But when we base our sense of self-worth on our financial success, it can be. We become more vulnerable to negative psychological consequences.
A group of recent studies found that people who based their self-esteem on financial success felt less autonomy and control over their lives, experienced more financial hassles, stress and anxiety, and made more financially-based social comparisons with others. These findings were consistent regardless of other variables, such as financial status, materialistic values and importance of financial goals (Park et al., 2017).
Because our culture tends to value the accumulation of wealth, we may not always be aware of the potential downsides of wrapping our identity and self-worth around financial pursuits. But for those of us who tend to gravitate toward using financial success as a source of self-esteem, it’s important to realize that it has unintended consequences.
Working with 738 participants, researchers developed a Financial Contingency of Self-Worth (CSW) scale to measure the degree to which people base their self-esteem on financial success, then conducted a series of studies to examine what happened when people felt that their sense of financial security was threatened.
When participants whose self-worth was tied to financial success were asked to write about a financial stressor, their sense of autonomy decreased and they showed increased disengagement from their financial problems — in other words, they stopped searching for solutions. Participants who didn’t tie their self-esteem to financial success didn’t experience these negative consequences.
The study also found that when participants whose self-esteem was based on financial success were led to believe that they’d experience financial instability in the future, they became more cautious with respect to extravagant spending decisions. This caution, researchers found, reflected a desire to protect their self-esteem following financial threat.
Researchers coded the type of language participants used to describe their financial problems, finding that those who heavily based their self-worth on financial success used more negative emotion-related words, like “sadness” and “anger.” Just thinking about a financial problem generated a lot of stress and negative emotions for these individuals.
Then an interesting solution presented itself….
When researchers asked participants to self-affirm by thinking about their personal strengths, the negative psychological effects were eliminated.
“This suggests that self-esteem concerns emerge when people are thinking about financial problems,” researcher Lora Park said. “But if you can repair their self-esteem by having them think about their strengths, there’s no reduction in feelings of autonomy.” In other words, a little bit of self-affirmation may go a long way toward helping us regain self-determination and a sense of control over our lives.
Taking that one step further, perhaps it is reasonable to conclude that if people can improve their sense of self-worth by reminding themselves of their strengths, they’d ultimately be able to de-link their financial achievements from their sense of self-worth.
For more in-depth information on Self-Esteem, please see our Self-Esteem section.
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