A new study suggests a psychological cost to the pursuit of more money.
Although the pursuit of money is not in and of itself bad, when people tie their self-worth to the pursuit of financial success, they are more vulnerable to negative psychological consequences, according to Dr. Lora Park, an associate professor of psychology at the University at Buffalo and the study’s lead author.
According to the study’s findings, basing self-esteem on financial success led to making more financially-based social comparisons with others, feeling less autonomy and control over one’s life, and experiencing more financial hassles, stress and anxiety. These findings were evident even after accounting for other variables, such as financial status, materialistic values, and importance of financial goals, according to researchers.
“People don’t often think of the possible downsides of wrapping their identity and self-worth around financial pursuits, because our society values wealth as a model of how one should be in the world,” said Park. “It’s important to realize these costs because people are gravitating toward this domain as a source of self-esteem without realizing that it has these unintended consequences.”
For the study, researchers recruited 349 college students and a nationally representative group of 389 participants after developing a scale to measure Financial Contingency of Self-Worth (CSW), or the degree to which people base their self-esteem on financial success.
They then conducted a series of experiments to examine the effects of threatening people’s sense of financial security.
“When we asked people to write about a financial stressor, they experienced a drop in their feelings of autonomy,” Park said. “They also showed more disengagement from their financial problems — they gave up searching for solutions. We didn’t find this in people who didn’t tie their self-esteem to financial success or among those who were asked to write about an academic stressor.”
In the essays, researchers also coded the type of language participants used to describe their financial problems.
“We found that people who highly based their self-worth on financial success used more negative emotion-related words, like sadness and anger,” Park said. “This demonstrates that just thinking about a financial problem generates a lot of stress and negative emotions for these individuals.”
But this effect is eliminated if you get people to self-affirm by giving them an opportunity to think about their personal strengths, according to Park.
“This suggests that self-esteem concerns emerge when people are thinking about financial problems, but if you can repair their self-esteem by having them think about their strengths, then there is no reduction in feelings of autonomy,” she said.
A final study found that people who based their self-esteem on financial success — and were led to believe that they would experience financial instability in their future — became more cautious when it came to extravagant spending decisions. This could be interpreted as a desire to protect their self-esteem following this financial threat, Park suggested.
The study was published in the journal Personality and Social Psychology Bulletin.
Source: University at Buffalo
Photo: Credit: University at Buffalo.