Financial Literacy Tips for Self-Worth

Continued financial literacy notes from Financial Literacy and Mental Health

Hedonic Adaptation

  • Amount of money !== mindset
  • Money can change quality of life but does not impact well being
  • Happiness? See lottery winners

There is a lot of information out there now about hedonic adaptation and how we get really used to stuff. Dr. Laurie Santos’ popular Yale course The Science of Well-Being does a great job of distilling all the known research and applying the lessons to your life.

Basically, all our societal ideas about money is wrong. Money is just a tool, whereas society treats it like the actual end result. We know very well that money itself doesn’t bring happiness and even Silicon Valley billionaires subscribe to coaches and gurus.

Money does lift oneself up from poverty but after say all your needs are met, why need more. The mind very quickly adapts to a situation and then only wants more after that. It’s certainly a helpful driver to survival in the wilderness, but not so much in the modern world.

Essentially to thwart hedonic adaptation, find out your inner goal, the actual objective, that brings happiness to life, and relegate money as simply the bridge to that goal.


  • Labeling ourselves based on our finances
  • Where did I learn to speak to myself this way

Poor is a description of lacking money and it also describes inferiority. No wonder it really sucks to use it to describe ourselves. Other words like cheap and modest further define our relationship to money in a way that we also embody as an identity. Looking deeper into why we use labels for ourselves is a way to start unlocking our real motivations.

For the longest time I was a thrifty person and everything I did had to be within this weird continuum of old and used. Like I only shopped at vintage stores and was modest about my appearance. My furniture was all hand me downs and I relished in shabby chic. Then I just woke up one day that I was perpetuating my mom’s idea of what our lives were to be like in middle school. I virtually gave everything away and started from scratch.

False Narratives

  • Pay grade equals success
  • I’m not worth spending money on

The speaker suggested we combat false narratives like our self-worth by asking the questions below:

  • Where did I learn to be this way?
  • What leads me to believe this is even true?
  • Would I judge my best friend the way I judge myself?
  • What would I say to my best friend if they were going through this?

It’s obvious to me that my parent’s didn’t set the greatest financial example. Money was a chaotic instrument in the home. But that’s not enough to just know the source, I needed to look deeply at how I formed a relationship with it. I saw that thoughts of self-worth and fitting in transferred over to money. I deserved money but I didn’t deserve the joys that came of it. I didn’t feel belonging in the teenage world so what was the point of buying things.

I was harsh on myself and still am. Sure we need to save for retirement or a rainy day but I also place impossible standards on all of that. If I was serious I’d actually set realistic goals and work towards meeting them, understanding there is hope and possibility. This is how I’d approach a friend, I’d console them and show them a path forward.

Healthy Relationship with Money

  • Break down goals from large ones to small ones
  • Reward myself for my progress
  • What does Guilt mean? Speak to it, what would it say, create a dialogue
  • Dialectical: Two opposing beliefs can be true at the same time
  • Radical Acceptance: Accept money situation, neither good nor bad

The obvious approach with money or any large problem is to break it down into smaller pieces and work each one. Directing your focus on what is immediately in front of you is more effective than trying to juggle the entire plan all the time. Within those little sprints toward milestones, reward yourself for progress. I’m reminded of Before Happiness by Shawn Achor which details brain hacks related to rewarding oneself to cross the finish line.

Creating a dialogue with guilt was an interesting tip because I think of guilt as the symptom than the problem itself. But I can see it’s a key to understanding the original problem. Guilt from money feels displaced for me, meaning I can not see the original reason I would feel that way. Guilt implies that we’ve seen suffering and want to help but we didn’t and we’re drawn back to do something. If you feel guilty buying nice clothes, it’s not the clothes, it’s something about the clothes or related memory. Maybe an estranged parent who shopped like that, maybe body image. It could dive into trauma even.

I still don’t quite understand dialectical approaches to therapy but I suppose a dialectical approach to money is acknowledging opposing beliefs can exist and from there, developing a common truth or relationship between them. I have the urge to throw everything into the stock market but I also want to save money for a home. If approached as two opposing problems where one must win, I will be forever in conflict because there is no actual right answer. Yet society tells us there are a lot of must dos and must don’ts. A dialectical approach might say accept they are both true, so then how can they happen if so. Ok, maybe a home is more important to me so save money now and invest just a little.

The last takeaway was radical acceptance, accept a bad situation wholly and fully without judgement. No “it’s okays” here. Seems easy enough for losing your wallet, but if it isn’t, like a spouse gambling your savings away, then it’s quite radical to say accept the situation. For me, to understand radical acceptance is a way to gauge what my limits are for financial chaos and to plan for those contingencies.