Canadian Finance Blog

Posted: 04 May 2011 02:00 AM PDT

Sometimes spending money just makes you feel good. It’s not the actual action of giving away money, it’s the result of dropping a load of cash on something nice, like a weekend away, or an afternoon at the spa, or a shiny new car. The nicer things you have, the nicer you feel. This is something that I think a lot of us have known for awhile, but until I read this post over at The Simple Dollar, I came to the following realization. One’s self worth has a huge impact on their net worth.

self worth

If you are constantly feeling bad about yourself, or a situation, then it would be no surprise if you also felt the need to spend money on small or large things to make you feel better. Here’s a couple steps to identify whether or not you have this problem and what you can do to change it.

Identify the Problem

Trying to figure out if you are facing emotional difficulties can be hard for a lot of us. Tying that together to your finances can be downright impossible. The best thing to do is to ask a close friend that you trust what they think. It often takes an outside eye to determine these things for you. If you don’t have that option, the best thing you can do is grab your financial transactions over the last month. Write them down into two different categories. Split them between necessary and planned expenses that happen every month, like rent and bills, and impulse purchases. It might be a movie you decided to see at the last minute, or a chocolate bar or two that you picked up while grocery shopping. Now, go through each of those impulse purchases one by one and try to remember what you were feeling when you made that purchase. Were you upset because of problems at work? Were you sad because of something your friend said? Or were you just excited by something that you saw? If you determine that the majority of your emotions were negative when you made impulse purchases, it may be that you have a self worth/net worth problem.

While you are at it, total up your impulse purchases over the last month. Perhaps seeing it all added up together will give you a little shock to the system that could help you when you find yourself at the checkout with six boxes of frozen pizzas.

Replace the Good Feeling

One good step to take would be to find something else, other than purchases, that make you feel good. Maybe a nice cup of home brewed coffee just makes you feel cozy and safe, or perhaps you just need a good chat with your best friend. Whatever it is, find something in your life that gives you the same sort of feeling that you get when you purchase something nice for yourself. If you can’t find anything that’s equivalent, try to determine if there is something inexpensive you can purchase that will give you the same emotional boost as a more expensive purchase. Instead of a new pair of shoes, you might just buy a small bag of chips. Personally, when I was in college, I found that going to the library and getting out a stack of books made me feel like there was the possibility of a good future – even if the books didn’t turn out to be as good as expected, just the feeling that there was hope for a good read gave me a quick emotional high.

Cure the Cause

If you have identified the problem and taken some steps to replace the good feeling, please recognize that it is only a stopgap for your finances while you struggle. Ideally, you will work together with someone to get at the root of the problem. Stopping your impulse purchases is a great step to take, but it won’t keep you from having low self esteem. If you can get rid of the reason you are feeling down, like the woman did in the aforementioned article by getting out of an abusive relationship, then you might find that the financial implications will solve themselves.

Have you ever struggled with a low sense of self worth? How did it impact your net worth?

Self Worth and Net Worth originally appeared on Canadian Finance Blog on May 4, 2011.