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Financial Self-Worth versus Financial Codependency

The professions of financial services and psychotherapy each have many of their own specific terms. With a growing understanding that these two professions have an overlapping area in feelings and emotions, new terms are starting to emerge. One of these is financial self-worth.

While financial net worth and financial self-worth are sometimes used synonymously, they actually are very different. Financial net worth is made up of our monetary assets minus our liabilities. Financial self-worth is the ability to feel positive about who we are and to be comfortable with our financial situation and the amount of money we have.

Another related term, with still a different meaning, is financial self-esteem. As an example, you may feel great for a while about making a sale that has helped your financial situation, yet still have an inner desire to get more money.  The successful sale gave only a temporary boost to your financial self-esteem.

Our financial self-worth becomes greater as we feel more confident and comfortable with who we are around our finances. The greater our financial self-worth becomes, the less we act out of financial codependency. Financial codependency is where we place the financial needs of others as more important than our own. This plays out in many different ways such as needing to buy everyone’s meals, buying excessive gifts, helping others get out of debt, loaning family or friends money with the expectation that it may not be returned, or buying cars, houses, trips, or college educations for our children. While these all may be nice things to do, they also may harm us or even the person we are trying to help.

When we create a pattern of excessive giving, it eventually becomes an expectation and something the other person starts to rely on. This teaches the other person to become reliant on others rather than independent with their finances. While there is certainly value and importance in giving, the question becomes to what degree do we give and what do we hope to teach our children or the other person in this process. When we give too much, we deny our children or the other person the opportunity to learn about finances and the consequences of poor financial decisions. This denial delays the learning opportunity until the time comes when the handout no longer exists. If children have only learned that they can get what they want and the parents will pay for it, when the parents are no longer in the picture, they financially crash. In this situation the children have no financial self-worth, because they did not earn what they have and have no understanding of finances.

To help children improve their financial self-worth and decrease their financial codependency, it is wise for parents to teach them about finances and money at a young age. Strong financial parenting creates ways for children to save, tithe, and learn from their financial mistakes while understanding the feelings that get stirred with certain financial decisions. It also helps validate healthy financial decisions.

As adults, we also can improve our financial self-worth by taking the time to understand finances rather than ignoring them. We can explore the feelings that motivate us to make financial decisions that are not in our best interests and that keep us from moving forward in making healthy financial decisions. This helps us create ways to make financial decisions with self-integrity, meaning our words, thoughts, feelings, and body language are saying the same things about our financial decisions. .