BUFFALO, N.Y. — Earning your next raise or simply some extra cash in your pocket is a big-time confidence booster — but tying your sense of self-worth to financial success can lead to negative self-comparisons to others as well as an increase in stress and anxiety, a new study finds.
Basing feelings of self-esteem on financial success — or lack thereof — is a risky parallel that increases vulnerability to negative psychological drawbacks, researchers at the University at Buffalo study learned. This perspective is linked to feeling a lack of control and helps shape a negative identity rooted in topsy-turvy materialistic values. While recent studies have cautioned against basing self-worth on shallow markers, this new study focuses on financial worth.
“People don’t often think of the possible down sides of wrapping their identity and self-worth around financial pursuits, because our society values wealth as a model of how one should be in the world,” says lead researcher Lora Park, an associate professor of psychology, in a university news release. “It’s important to realize these costs because people are gravitating toward this domain as a source of self-esteem without realizing that it has these unintended consequences.”
Buffalo graduate student Deborah Ward and assistant professor of psychology Kristin Naragon-Gainey worked with 349 college students as well as a nationally representative collection of 389 study participants. The study co-authors created a “Financial Contingency of Self-Worth” scale (CSW) measuring how deeply people base their self-esteem in financial goals. They then tested participants’ responses to threats on their financial security.
The researchers analyzed essays that the participants wrote about specific financial stressors in addition to essays on specific academic stressors in their lives. The responses showed that many who tied self-worth to financial worth expressed feelings of lacking autonomy and negative phrasing rooted in stress and anger.
“When we asked people to write about a financial stressor, they experienced a drop in their feelings of autonomy,” says Park. “They also showed more disengagement from their financial problems – they gave up searching for solutions. We didn’t find this in people who didn’t tie their self-esteem to financial success or among those who were asked to write about an academic stressor.”
A final experiment in the study exposed how participants responded when they felt their financial stability was being threatened. Those who measured their self-esteem through financial ups and downs were more cautious with spending money, which the authors suggest is a measure used to protect their self-esteem.
“[S]elf-esteem concerns emerge when people are thinking about financial problems, but if you can repair their self-esteem by having them think about their strengths, then there is no reduction in feelings of autonomy,” adds Park.
The researchers said the negative relationship between money and self-worth could have implications similar to tying self-esteem too closely to intimate personal relationships and work, group environments.
“We found that people who highly based their self-worth on financial success used more negative emotion-related words, like sadness and anger,” says Park. “This demonstrates that just thinking about a financial problem generates a lot of stress and negative emotions for these individuals.”
Interestingly, the team found that the effects of the study were relieved and self-esteem boosted back up by having participants focus on their personal strengths.
This study was published in the journal Personality and Social Psychology Bulletin.