Achieve your financial goals and be a lot happier with yourself

Personal Finance and Self-Esteem

by Cathy Tanaka


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In his book, The Six Pillars of Self-Esteem, Dr. Nathaniel Branden defines self-esteem as a combination of (1) "confidence in our ability to think and cope with the basic challenges of life," and (2) "confidence in our right to be successful and happy." Thus, self-esteem includes self-sufficiency, which of course in our society includes the ability to support oneself financially. This ability is the crux of the connection between personal finance and self-esteem. The reason so many people feel down on themselves when it comes to personal finance is that they either don't believe that they can support themselves or they've decided (consciously or unconsciously) not to do so. The other side of the coin, of course, is that by taking control of their finances, these same people can boost their self-esteem. Here's how the six pillars can help:

Pillar #1: Living Consciously - Living consciously means to live mindfully and to be aware of your actions, values, thoughts and feelings. In the context of managing your money, living consciously at the basic level means to be aware of how you bring in money and how you allocate it. That is why many experts say the first step toward getting control of your finances (and getting out of debt) is to keep track of all of your expenses for a week so you can see where the money is going. (It is generally easier to identify sources of income than expenditures.)

If your spending has put you in debt, start taking the steps to financial freedom today!

Pillar #2: Self-Acceptance - Self-acceptance in the context of self-esteem does not mean being happy with who you are as you are. Rather, it means acknowledging reality and what is, without judgment. When it comes to personal finance, this means accepting that you may not be able to afford to live the lifestyle you want on your current income. It means accepting that you've accumulated debt because of poor decisions and that you can't achieve all of your financial goals at the same time. It means looking at your financial state and accepting it for what it is, without being happy or sad about it.

Pillar #3: Self-Responsibility - In the self-esteem context, self-responsibility is knowing that you have control over most of your life. Thus, in terms of managing your finances, self-responsibility means acknowledging that you have control over how you spend and/or save your money. It also means that you have control over how much money you make. I think this pillar in particular is in synch with Dr. Thomas Stanley's findings in his Millionaire Next Door series, in which Dr. Stanley repeatedly notes that self-made millionaires are rarely the recipients of regular monetary gifts from their parents. In other words, self-made millionaires don't rely on other people for their money.

Pillar #4: Self-Assertiveness - Dr. Branden refers to self-assertiveness not in the sense of being belligerent but in the sense of having the quiet confidence to stand up for yourself because you believe in your right to exist and to have a happy life. In your financial world, this may mean learning to be honest with others about your financial situation (it can be hard to tell your friends that a restaurant is out of your budget), asking for a raise that you genuinely deserve, or even finding a new job with better pay and benefits.

Related: Keeping Up with Friends' Spending Habits

Pillar #5: Living Purposefully - It's hard to achieve anything without setting goals, and achievement is a key component of self-esteem. This is particularly true when it comes to money, since money is simply a means to an end. Whether your purpose is to buy your dream house, save for retirement or send your children to college, articulating that purpose and then taking steps to achieve it will boost your self-esteem.

Pillar #6: Personal Integrity - It's virtually impossible to feel good about yourself if your actions don't match your values. Saying "I want to pay off my credit cards" and then buying a new dress instead of wearing one you already own diminishes your self-esteem. And of course, it goes without saying that you shouldn't steal money, avoid paying your taxes, or expect someone to be your sugar daddy or mommy.

If you practice the six pillars of self-esteem when managing your money, you will not only be a lot closer to achieving your financial goals, you'll be a lot happier with yourself too.

Reviewed September 2017


Cathy publishes a blog called Chief Family Officer, featuring tips on finances, parenting, cooking and more.

Take the Next Step

  • Identify which of these six pillars of self-esteem you are currently not practicing when managing your money and list ways to remedy each and every one of the problem areas.
  • Use these guidelines, tips and tools to gain control of your spending and improve your financial situation.
  • Stop struggling to get ahead financially. Subscribe to our free weekly Surviving Tough Times newsletter aimed at helping you 'live better...for less'. Each issue features great ways to help you stretch your dollars and make the most of your resources. Subscribers get a copy of Are You Heading for Debt Trouble? A Simple Checklist And What You Can Do About It for FREE!

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