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Building self-esteem is critical for your financial success. In fact, it’s at the heart of my entire philosophy! Let’s talk about how to do it. But first, a story.

What does self-esteem have to do with spending? Even though you may logically know that how much money a person makes does not dictate their value, you probably include your job title when you introduce yourself or tell people what neighborhood you live in or where you are from.

Our money story influences our feelings of self-worth—until we decide otherwise, and our sense-of-self dictates our treatment of money. A study at the University of Buffalo found that when we base our self-worth on our net worth, we tend to compare ourselves to others and feel a loss of control over our lives. We feel more stress about our ability to handle our finances and this feeds our money shame.

You might say money shame is, in fact, the antithesis of self-esteem. And unfortunately, I know this from personal experience.

Many of you who have followed me for some time, or worked with me before, will know that my brother Keith committed suicide as the result of his money shame. His death inspired me to devote my life to helping others heal from their money shame, restore their sense of self-esteem, and live a fulfilling life both financially and emotionally.

At the time, I was in the midst of my own money crisis – and you better believe I had money shame, too. The Great Recession was in full swing, and I was out of a job (and therefore no income) pretty much overnight.

As a result, somewhat ironically I became my own first client. I had to figure out how to rebuild my finances; soon I discovered, however, that it was first necessary to rebuild my self-esteem. In particular, I realized it was necessary to restore my sense of esteem and worth before doing anything else.

And so the Money Detox process was born. Through my own trials and tribulations, I came to discover the importance of rebuilding my self-esteem for restoring my financial well-being, too. I also learned exactly how to walk through this seemingly uncertain process.

In this article, we’ll dive into some of the specifics. For further discussion, I invite you to join my Money Circle (which is currently still free during the coronavirus crisis).

The Psychology of Money

How to Build Self-Esteem - Rekindling The FlameMany people quietly calculate their self-worth by how much money they make, or by their job. They may go into debt to project a life of wealth to their friends. It reminds me of the old Will Rogers quote about people spending money they don’t have on things they don’t need to impress people they don’t like. Maintaining this cycle can be a lifelong struggle, and last for generations.

It’s just as important to note the toll that spending to impress takes on your confidence. In a job interview, the candidate with genuine interest in the position and confidence about the outcome either way will outshine the candidate with money desperation.

On the other end of the spectrum, some people don’t allow themselves to spend the money they have because they don’t feel worthy. In my book Money Detox, I tell the story of my client Jill who could not spend money, even though she had plenty. While a minimalist lifestyle was manageable on her own, letting someone else in was impossible. Her need to control every cent was ruining her closest relationship because she couldn’t allow herself or her partner to spend enough to enjoy life. The money she had carefully acquired became something she feared losing. Rather than enjoy it responsibly with someone she loved, it became a source of contention.

In reality, neither extreme is healthy – nor are they effective at generating the outcomes we want from life. But if that’s the case, then how do you strike a balance?

Love vs. Fear

Marianne Williamson’s book A Return to Love had a profound effect on my life. I read it at a time that I was still grappling with what would make me happy. She said there are only two emotions: love and fear. She points out that when we use possessions to fill our emptiness, we are looking for meaning in objects that cannot love us back. I realized this was true in my life.

When I suffered an emotional setback, I bought a new car. While I lavished my friends with gifts and dinners, I struggled to accept anything back from them. I felt like receiving their tokens of love was a sign of weakness, but in reality, playing the “big shot” was isolating for me and hurtful to them. I refused everyone’s help until I reached a point financially where I was in dire straits.

Losing and finding control

Facing bankruptcy, I was forced to accept financial help and began to part with the many things I had accumulated. I had to sell my beach house and find some liquidity from my possessions. Letting go of items that held sentimental value—a rolex, my fancy espresso machine, dining room furniture—I felt like so much emotional baggage was being lifted. My self-worth had been hiding behind all of this luxury clutter.

I thought hard about what my spending said about me. What did I value, and how did my spending reflect those values?

As a girl, my family had been of the lottery mindset. They all played the numbers, and the occasional win reinforced the idea that the next big win was just around the corner. Even though I had worked hard to make my money, I was still trying to buy the love of my friends and finance my happiness with my capacity to spend.

Anytime we tie our self-worth to things or circumstances, we let fear win. What if something happens to that job that defines you? What if the house burns down?

When I let people help me, I reached a new level of humility about my life circumstances. My friends still loved me, and they were the real safety net. Their support made me grateful. I let them express love in ways I had blocked before, and their support grew my sense of self-worth. It sounds strange, but by relying on others, I developed new confidence that led to the success of my next business. I had flipped the dynamic. My self-worth now fueled my net worth. 

I finally had a glimpse into how people with healthy self-esteem think about money differently. Starting over, I could realign my spending with my values. I had cracked the code for financial freedom, not just as a numbers game but as a spiritual place. Buying things to fill a void or impress someone is not how I wanted to spend my resources. Instead I wanted to use what I have to benefit others in the same loving ways that I had felt firsthand.


All the world’s religions share a concept of giving back. Tithing, zakat, dana, dakshina, and tzedakah are some of these concepts. Growing up, my family had skepticism about giving money to the church. But I have found that giving always comes back to the giver.

I set aside a portion of my income every month and give it away. Sometimes this is in the form of a charity contribution or to my spiritual community, but many of my contributions are more personal. I may send a note with a gift to a friend who brings me joy. I may write to an author who inspires me and include a check.

This is one of my favorite tasks. Paying it forward this way brightens someone’s day. Over time, I find it comes back to me in the form of a refund or a new client or a return gift, although it’s never expected. It connects me to others. It is pure love, not fear. Sending a gift from a place of abundance as an empowering gesture, knowing you have enough and are enough.

Gratitude is counter to the consumer mindset and keeping up with the Joneses. People are surprised and touched that someone thought of them. It warms the sender as well as the recipient and doesn’t require extra storage space.

Building Your Self-Esteem: Remembering Your Worth

There’s an exercise I always ask my clients to do:

List the things that give you worth and rank these items on a scale of 1 to 5. You should be thinking to yourself, just how worthy does this make me feel? Does your list really bring you happiness and reflect your values? Are there items you include to impress others? Do you continue habits to protect a lifestyle that no longer serves you?

This is just one exercise, but it’s an important starting point. If you can complete this critical exercise after serious introspection, you can begin developing the self-awareness (and in many cases, the financial awareness) required to build your self-esteem.

From there, you can always go deeper – for example, with the Money Detox process mentioned earlier or by joining The Money Detox Circle.

Self-esteem is not easy to build, rebuild, or maintain. But you can do it, one small step at a time. And if you need help, we have a whole community here waiting for you with open arms!

Tammy Lally

I BELIEVE MONEY IS NOT YOUR WORTH. Tammy Lally is an author, speaker, and Certified Money Coach (CMC). She helps others master their finances by first conquering their emotions around money, then by creating a comprehensive financial plan. She brings decades of experience and endless love to her bulletproof process for money mastery. She is the author of the book Money Detox, and her TED talk on Money Shame has over 2 million views.

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