Distinguishing Net Worth from Self-Worth

You are NOT the balance in your bank account.
You are NOT how much money you earn.
You are NOT your debt balances.

On a regular basis, I work with clients to support them in learning a scientific approach to money management which includes systemizing their use of cash flow to maximize the amount of freedom and choice that they have in their lives. As part of that process, we review what they earn, what they spend, and their account balances (i.e. bank accounts, credit cards, etc.).

And it always amazes me how often when I’m reviewing income, expenses, and balances (both bank accounts and debt), how often the client will feel such tremendous guilt and shame if they happen to be in a situation where they aren’t doing as well as they would like to be. It’s as if they take the information we’ve compiled and interpret it as a direct reflection of themselves.

So let me let you in on a little secret…your net worth is not your self-worth. So don’t confuse the two.

Your net worth is simply a calculation of what you own (assets) minus what you owe (liabilities). That’s it. It’s intended to be a benchmark at a point of time to evaluate your financial health. Think of it like a scorecard, if you will. Once you have your initial benchmark, the name of the game is to increase your net worth over time, primarily by saving money (increasing assets) and getting out of debt (decreasing liabilities). At any given time, your net worth is simply a data point that you can use to make future decisions about how to use your money.

Money is a tool to be used to support your life, not as a representation of your value in this world. You were born whole, perfect, and complete and even if your financial life isn’t going as well as you would like it to be, you are still that whole, perfect, and complete person. Yet money is indeed an emotional topic, and it’s very much one of the final “taboo” topics of our time…because as my client told me just this morning, “I felt this hole inside of me before because I was embarrassed about my financial situation. Now I know that I am not my money and my money is not me – it’s just a tool that I can use to support my goals and dreams!”

Building a strong financial foundation starts with understanding that you are separate from money. Money is simply a means of exchange used in today’s society. When you take the time to understand how your money can support you, you are able to empower yourself in your life!

So if today your financial situation isn’t quite what you’d like it to be – perhaps you’ve got more debt than you’d like or you don’t have much in savings – remind yourself that you are not your financial results, and that where you stand right now is simply information that may allow you to begin to more proactively strengthen and build a financial foundation fit to support you in your amazing future!

Share this:
Share this page via Email Share this page via Stumble Upon Share this page via Digg this Share this page via Facebook Share this page via Twitter

, , ,

No comments yet.

Leave a Reply