How Money Affects Your Self-Image

If someone asked you how good of a driver you are, what would you say? What about how hard of a worker or how kind of a person? Human beings have the tendency to rate themselves as better than average when given the opportunity (it’s known as the better-than-average or Lake Woebegon effect).

But did you know that the amount of money your family had while you were growing up can affect your self-image?

More money, more self-esteem

In a series of five experiments, Arizona State University researcher Michael E.W. Varnum found that the higher your social class—both currently and as a child—the more highly you tend to think of yourself.

wealth impactsParticipants were asked to identify their education and income levels, as well as describe what social class they believed themselves to be a part of, both currently and as children. They were also asked how much their parents made when they were growing up.

They rated themselves on nine qualities: memory, physical fitness, driving ability, honesty, sense of humor, attractiveness, intelligence, friendliness and cooking ability.

Overall, participants rated themselves as better than average on all nine qualities, consistent with the long-studied effect. (In an 1981 study, 93 percent of U.S. participants and 69 percent of Swedish participants thought their driving skills would put them in the top 50 percent of drivers.)

But those who reported higher childhood family income and social class and higher current income and social class thought they were even better in the nine areas than those from lower social classes. Across the five studies a higher education level was also a predictor of a more inflated sense of self.

Why does this happen?

From past research, we know that people of higher socioeconomic status have a more individualistic view of the world than others, Varnum said to Rewire. This means they’re more focused on the worth of individual people rather than that of a community. Individualism tends to go along with “an overly rosy opinion” of traits, he said.

“If you have this more individualistic outlook you’re more likely to engage in efforts to promote yourself and share your virtues with others,” Varnum said.

How can you avoid the human tendency to look at yourself through rose-colored glasses?

“If there are dimensions where you can get objective feedback, compare yourself on those metrics,” Varnum said.

Also consider the people who are the very best in the field. Take golf, for example. Maybe you think you’re really, really good and you have a tendency to brag about it.

“When we compare upwards, it tends to shift our evaluations of ourselves in a little more realistic direction,” Varnum said. “So if you set Tiger Woods as a person you’re going to compare yourself to instead of a toddler at putt-putt your estimation of your skills isn’t going to be as inflated.”

Katie Moritz

Katie Moritz is Rewire’s senior editor and a Pisces who enjoys thrift stores, rock concerts and pho. She covered politics for a newspaper in Juneau, Alaska, before driving down to balmy Minnesota to help produce long-standing public affairs show “Almanac” at Twin Cities PBS. Now she works on this here website. Reach her via email at [email protected] Follow her on Twitter @katecmoritz.