Measuring our self-worth by the number that is our net worth is toxic. The good thing is that it can be unlearned. Read on to find out how.
Do your emotions rise and fall with your investment accounts? Does a positive emotional state correlate with a high balance in your bank accounts? Do you get progressively sadder as your balances start to dwindle down? Do you hyper-focus on the salary your colleagues are making? If you answered yes to any of these questions, continue reading. You might be conflating your self-worth and net worth.
In Episode 77, we heard from Bernadette Joy. She left us with the idea that our self-worth cannot be our net worth, nor can our net worth ever dictate our self-worth. At the same time, the relationship between the two—particularly among BIPOC— absolutely exists. No matter the financial goals she meets, balancing he two has been a constant journey for Bernadette. Here’s what we mean:
To put it simply, self-worth is how we view ourselves. When you have a positive self-worth, it means that you value yourself and see yourself as someone worthy of joy and abundance.
Defining Net Worth
Your net worth is the value of everything you own, minus the value of everything you owe.
Assets – Liabilities = Net Worth
If you have a lot of debt, you could either have a low net worth or even a negative net worth. A positive net worth means that your assets outweigh or outperform your liabilities. For clarity on defining assets, liabilities, and even how to calculate your net worth, read our full blog piece here.
Why It’s Hard To Balance Self-Worth With Net Worth
If you’re new to the Yo Quiero Dinero Podcast platform, know this: our dinero talk is closely tied to mindset and perception of self. AKA self-worth.
Why this matters for a personal finance podcast like ours has to do with the communities we serve. Many of our guests are first generation wealth-builders, and have not been raised with the belief and environment that wealth is something for them. Our environment, after all, is one of the top contributors of our sense of self-worth. First-generation wealth-builders can sometimes fall into a low sense of self-worth when it comes to abundance, meaning a belief that they do not belong in the wealth-building space (this is called imposter syndrome!).
In this scenario, we can see how self-worth impacts our net worth: if we continue thinking we do not belong in wealth-building spaces, we will miss out on opportunities like financial education, financial planning, and investing, the last of which is the ultimate bridge for wealth inequality. So while this is true, how do we prevent a toxic relationship between our self-worth and net worth?
5 Steps To Separate Your Self-Worth And Net Worth
If we don’t work on balancing the two, we’re in for an emotional rollercoaster. No matter the salary, no matter the raise, no matter the size of your emergency fund, you risk not ever feeling like it’s “enough,” or that you’re doing enough. Here are five steps you can take to begin separating your self-worth from your net worth.
1. Find Value In Yourself Outside Of Your Money
You are more than your money, period. Take some time to do some loving on yourself. Here are some questions to guide this important step in your journey:
- How do I show myself love?
- When is the last time I felt at peace?
- I love that I can do this: __________________
- I feel my like my most poderosa-self when I _______
2. Identify Your Why In Your Money Journey
We’ve heard from so many of our guests that when their money journey got tough, they turned to their why. Your why is your reason for, in this case, getting your money right.
Your why is not to make more money. That is your how. For example: the why behind the Yo Quiero Dinero Podcast platform is to empower more women of color to take control of their finances and leverage their skills to build wealth through side hustles. YQD’s why isn’t to expand its audience. That’s YQD’s how.
So go back to the beginning of your journey and ask yourself why you decided to put in this work. What is driving you? What solutions are you trying to create in your life? Believe in your why.
Write this down somewhere you can see it as a reminder to yourself!
3. Build Your Financial Literacy
The more you know about personal finance, the more you can rely on things like market dynamics, improvements that need to be made to your budgeting, or high interest rates as the areas you need to tackle, versus only positioning yourself as the reason for any set-backs.
Your money isn’t where you’d like it to be because you are a terrible person (one example of negative self-talk). It’s because you have never tried to budget, much less even know how to create a budget. Value yourself enough to invest time and energy into learning about personal finance. Stop being your own punching bag.
4. Curate Your Social Media Feeds Intentionally
People say, “Comparison is the thief of joy” for a reason. Today, social media makes it difficult for us not to compare ourselves. And if you’re on the #PersonalFinance side of social media, maybe your feeds are full of net worth updates, salary disclosures, and huge budgets. When we don’t have a strong sense of self-worth, we can look at these things through a lens of failure, anger, and even jealousy.
If these things are fueling low self-worth, rather than fueling growth in your money journey, it’s time to clean your feed up a bit. Curate it with things that bring you joy and remind you of what you love about yourself #1). Curate it with things that remind you of your why (#2).
5. Design Your Personal Finance Journey With Only You In Mind
If something about your money journey is making you feel miserable and like crap, there might be something off about your journey. Something isn’t aligned with who you are. Maybe you tried something you saw on Instagram, or something you saw another influencer do. But the more you engage with steps 1 through 4, the clearer it will be to see what makes the most sense for you.
Craft your own budget, craft your own plan, craft your own goals.
What we mean by, “Your self-worth is your net worth” is that you will ultimately decide the boundaries and limits of your money journey. On the other hand, your net worth should not be your self-worth—we don’t need to remind you that women of color consistently and historically get screwed over. The two influence each other greatly, but neither should have full control over the other.