Lesson 3: Self-Worth Vs. Net Worth
Learning Objective/s
Distinguish between self-worth & net worth
Create a net worth statement
Money & Our Identity
It is very common for women to confuse our self-worth with our networth — we haven’t been taught how to embody our value or worth and somewhere along the line, we seem to have muddled money as being a sense of our identity.
What money we have and our perception of how wealthy we are influences our sense of identity and belonging.
Self-worth is another word for self-esteem.
Self-worth refers to our overall sense of value; our sense of self; who we are; our worth; our beliefs about ourselves; our appearance; social status; values; behaviour and emotions. Our self-worth also affects other elements in our life, which are harder to measure such as love, integrity, kindness, emotional intelligence and balance.
Self-worth is the term we use to describe how we feel towards ourselves. If we feel good about ourselves, most of the time, we are thought to have a higher self-worth and if we don’t feel good about ourselves often, then we’re said to have a lower self-worth.
Mindful Question / Reflection Do you tend to value yourself based on what you do for a job, how much money you have or your social status?
Mindful Question / Reflection How do you feel about other people around you that have higher paying jobs, more money or material assets, and appear more successful than you?
Our net worth on the other hand is a financial measurement. It compares what we own, (our assets) and what we owe (our debts).
Knowing our net worth is important for two reasons:
- It gives us an understanding of our current financial situation.
- It provides a reference point for measuring progress toward our financial goals. (To track our progress, we calculate our net worth now and recalculate it once or twice a year).
Ideally, as we continue to earn and save, our net worth will grow. If our net worth is low or going backwards then it’s usually an indication that our finances aren’t in good shape or that we need to work on spending less and saving more money.
Mindful Activity: Calculate Your Net Worth
| ONLINE: | Calculate Your Net Worth |
| Or: | |
| PDF: | Creating A Personal Net Worth Statement |
Mixing Self-Worth & Net Worth
Many of us associate our self-worth and value as a person with our net worth — or the amount of money we have in the bank, the salary we earn, our relationship status, or our material possessions
While it’s human nature to compare ourselves to others, when we compare, we typically compare the external things — things that are easier to measure; the size of our bank accounts, salaries, cars, homes, clothes and other ‘image’ related material things.
Comparing our internal measures is much more difficult because it can be hard to measure how we treat and take care of ourselves and others; our compassion, love, capacity for joy and gratitude and ultimately our happiness.
In society today, we’ve adopted the easier method of measuring our worth by what we have, instead of who we are.
Our worth should not be measured by the external things alone — if someone else has better clothes than us, or lives in a nicer house — it should not make them any better, more worthwhile or valuable than we are.
If we measured our self-worth by our internal measures, we’d likely find that there is no competition, as we don’t often compete to be the kindest, or have the most integrity, or to be the most confident or generous.
In summary, the difference between our self-worth and our net worth is:
| Our Self-Worth | Our Net Worth | |
|---|---|---|
| Internal Measure Right-Brain Based on feelings Can only acquire from ourselves Creates Happiness |
VS | External, numeric measure Left-Brain Based on earnings and material possessions Can acquire from others Creates an image of happiness |
Mindful Question / Reflection
Do you think that you mix up your self-worth and net-worth?
How do you currently value yourself?
Do you measure yourself against what you do and what you own vs. who you are and how you feel?
Mindful Activity: What do you do?
Often one of the first questions we ask strangers is “What do you do?”
On the surface, it seems like an okay question. We ask it of each other every day as a simple way to find common ground to talk to strangers.
But let’s think about this question.
What do you do? I’m sure there are lots of things. You sleep, drink water, eat…
But that’s not what we really want to know, is it?
What we’re actually asking when we ask this question, unknowingly, is:
How do you earn a living?
How much money do you make?
What is your socio-economic status?
And based on that status, where do I fall on the socio-economic ladder compared to you?
Am I a rung above you? Below you?
How should I judge you? Are you worth my time?
Without truly being aware, subconsciously, we use this information gathered as a measure of worth.
Let’s change the question altogether.
The next time someone asks what you do, try this: Don’t give away your job title. Instead, tell them what you’re passionate about, and then change course by asking them what they are passionate about:
The stranger asks What do you do?
You could simply reply ‘I practice yoga” or “ I love to cook:” or “I’m learning guitar”’ Followed by a question in response:
“What are you passionate about?”
Think of this shift as changing a noun into a verb. Instead of giving people a title (i.e., a box to put you in), let them know what you enjoy doing — what you’re passionate about.
Let the conversation morph into something far more interesting and one that allows you to learn more about each other.
The impact of Self-Worth on our Finances
Our self-worth and how we feel about ourselves affects the way we manage our money.
Let’s imagine for a moment that we don’t believe that we’ll ever be rich. If that’s our belief then we’re probably not going to bother saving, investing or seeking financial advice. These negative beliefs about ourselves cause us to behave in ways that don’t benefit us or ways that may sabotage our success and happiness.
Our self-worth is a function of how we value ourselves. To increase our self-worth we need to be able to define what we value in life and how we measure happiness and success.
So let’s work out what happiness and success mean to us individually.
