Self-worth and net worth have a very complicated relationship in modern America.

Photo credit: Louis Leray

Think about the last time you were out with a group of people. How long did it take for someone to ask: “So, what do you do?”  Chances are, not very long! What we do for a living – and its corollary, what we earn from that work – is often used as a blunt instrument for personal assessment.

Self-worth is how we value ourselves. It is an internal foundation for making wise, healthy decisions about multiple areas of our lives, including our personal finances.

Net worth is the difference between our assets and our liabilities. It is a mathematical calculation that tells us the delta between what we own and what we owe.

Alas, we live in a world where self-worth and net worth are often blended together when asking such highly personal questions as: Who am I? Am I enough? What is my purpose in this life?

In the aftermath of the 2008 financial crisis there is (thankfully!) increased debate on a macro level about the optimal relationship between these two concepts.

Yet on a micro level, around the world, I continue to see that the net worth of women frequently suffers as a result of insufficient support for the nurturing of their self-worth. Women have entirely too a long history of their contributions being undervalued – by themselves and by others.

According to studies conducted by Carnegie Mellon Professor Linda Babcock, women are less likely than men to negotiate. Research shows women are 2.5x more likely than men to say they feel “a great deal of apprehension” about negotiating. The financial impact is stark.

By not negotiating a first salary, an individual stands to lose more than $500,000 in cumulative earnings by age 60. And men are four times as likely as women to negotiate their first salary.  Conversely, women who do consistently negotiate their salary increases earn at least $1 million more during their careers than women who don’t. So having the confidence and self-worth to “Ask For It” quite literally can lead to an increased net worth.

What can you do about this in your own life? Research your field or area of interest on a site like Review all the activities you do and assign research-based dollar amounts. Are your bottom line contributions being paid at current market value? If not, considering negotiating a salary increase or raising your fees. For support during this process, read ASK FOR IT by Linda Babcock and Sara Laschever and OVERCOMING UNDEREARNING by women and money expert Barbara Stanny or hire a negotiation-training consultant through organizations such as She Negotiates. If feeling nervous, just start with a baby step.

“Do not wait; the time will never be ‘just right’. Start where you stand, and work with whatever tools you may have at your command, and better tools will be found as you go along.”
– Napoleon Hill

So today, ask yourself what you can do to positively (re)define your self-worth to more proactively create your highly personal net worth.