According to http://dictionary.reference.com/browse/self-esteem Self-Esteem is a realistic respect for or favorable impression of oneself; self-respect an inordinantely or exaggeratedly favorable impression of oneself. It is basically your opinion of yourself, be it good or bad.

Other words used in relation to self-esteem include:
self-pride
self-regard
self-respect
confidence
morale
dignity
worth

There is a healthy balance between self-esteem and boasting. It's one thing ti know you have worth and another to be so haughty that you look down on other people.

A low self-esteem is also not a healthy way to live. You will be unhappy, have low confidence, and find it impossible to be who you want to be.

What Creates Our Self-Esteem?
Various factors make our Self-Esteem what it is. Your opinion does not have to be based on anything except that, but there are some typical factors that people rely on when it comes to rating themselves. These include your job and its worth; the respect or lack thereof from other people; your belief whether or not you are a successful person and what you base success on; how you see yourself (self-image); how you feel about your strenghts and your weaknesses; how you feel about your social status; how well you relate to others; the ability to make your own decisions or lack thereof, etc.

Creating A Healthy Self-Esteem
http://www.more-selfesteem.com/self_esteem.htm suggests the following:
1.Face your fears - challenges seem scary but your fears are usually exagerated. Facing your fears increases your confidence and boosts your esteem.
2.Forget your failures - learn from them. Avoid making the same mistakes again but don't limit yourself by assuming you failed before so you can't succeed this time. Try again, you're wiser and stronger. Don't be trapped in the past!
3.Know what you want and ask for it. Learn about being assertive - you deserve your dreams to come true!
4.Reward yourself when you succeed. No-one else will! Isn't everything easier when you take time to help yourself? Make a list of your successes and focus on the positive.
5.Talk - We often make assumptions about a situation or person which are not true. Your attitude and behaviour can be negatively affected so if you have any doubt or question ask and don't assume you know why or how.
6.Don't be defeated! Try something else. You are not going to be defeated by one failed attempt are you? Doesn't everyone fail before they succeed? All you need is a different approach. Good luck! I wish you happiness and success!
My Personal Experience
Affirmations: When I was first told about affirmations I laughed. Now, a decade later, I know the value of them first hand and how, with time and patience, they CAN and WILL make a difference in your life - if you really want them to.

What is an affirmation?
According to www.dictionary.com an affirmation is:
-the act or an instance of affirming; state of being affirmed
-the assertion that something exists or is true
-something that is affirmed; a statement or proposition that is declared to be true
-confirmation or ratification of the truth or validity of a prior judgment, decision, etc

It is the 2nd and 3rd definition we work on.
Most of our self-talk, the things that run through our minds without us even thinking about them, are negative thoughts.
ie. I can't do (fill in the blank); I am no good; I am not smart; I am not handsome/pretty, etc. Most of these thoughts run through our minds without us knowing it.

The idea of an affirmation is to change the way we think over a period of time. We didn't start off in life thinking negatively. Most of us had loving guardians/parents who told us we were good children, smart, could make lots of friends, we were loved etc. But even if we didn't have that positive nurturing, our own thoughts take over at a certain age.

What we do is take a negative thought, such as the ones above, and turn them into a positive and focus on them for a period of time. The important thing to remember about affirmations is that they are not going to work overnight but that they CAN and DO work if you are willing to work with them.

How To Write An Affirmation
I've learned many things about affirmations over the years and the following are the most imortant to remember:

1. Personalize your affirmations. Start with or use the words: “I,” “me,” and “my.” You are focusing on YOU and not other people so make it personal to YOU.

2. Write your affirmations in the PRESENT tense. Use I CAN, I AM, I HAVE to begin your affirmation. To use the statement I WILL is future, so do not use it.

3. Make your affirmations realistic. Don't be grandious in your thinking. For example, saying something like “I am in control of my life,” is not true. Nobody is ever in perfect control of their life all the time. Instead, try, “I have control over my decisions, actions and words most of the time.”

4. Be positive! Remember, you are turning the NEGATIVE into POSITIVE. One idea is to write down your negative thought and then write the complete opposite using the above guidelines. Retraining your brain is not easy, but keep it positive. It's not important that you believe it right away. Over time it will begin to replace the negative tape that runs through your mind, so be positive.

5. Make your affirmations short and easy. Long and winded ones will bore you and you are unlikely to remember them. You're not writing a poem, you're writing an affirmation. Keep it to one sentence.

6. How To Use Affirmations:
It is suggested to do the following:
-Write each affirmation out 10 X daily..
-Say each affirmation out loud 10 X daily.
-Visualize each affirmation as the person you are affirming to be.

Less Time and Just As Effective:
Get some Blank Recipe Cards, Colourful Pens and Stickers and Your List of Personal Affirmations for Your Situation.
A - On each recipe card, write out one affirmation. Use bright colours and stickers to decorate it and make it look upbeat and positive.
B - Put completled cards in a recipe box.
C - Everyday at the same time get your Affirmation Cards out and read each one out loud 3 times, in front of a mirror if possible. Some people keep an Affirmation Journal and write each affirmation out once for a reference book.
D - Place a copy of all your affirmations on one sheet of paper in places you visit often: the refridgerator, a mirror, office desk, etc. When you see them, you will be able to practice a few.
E - Another way to use Positive Affirmations is to record your personal affirmations using your own voice and then listening to them the same way you would listen to a guided meditation or a Book on Cassette/CD.

Some simple examples of Positive Affirmations
I am a happy person.
I enjoy my life.
I make friends easily.
I am a likeable person.
I have good qualities.
I am free to choose the life I want to live.
I deserve to be happy.
I like myself.
I love myself.
I accept myself unconditionally.
I respect myself.

PERSONALIZING AFFIRMATIONS
To personalize your affirmations, start with or use the words: “I,” “me,” and “my.” You are focusing on YOU and not other people, so make it personal to/by/about YOU. Then follow the above rules.

Everybody is going to have different affirmations because nobody has the same issues to deal with. The key is to personalize YOUR affirmations for YOU and YOUR NEEDS. Don't ask people to write affirmations for you because they will see you different than you see yourself.
I have seen a major difference in my life since working with affirmations. I'm living proof that they do work if you are willing to work at it and give them the time it takes to retrain the brain.

I still work on affirmations to this day because there are always going to be issues that challenge how I think about myself and how I feel about my worth. Our worth is not how we compare to another person but how we compare to what we think we should be and what we are.

Remember that your Self-Esteem is a vital foundation of your life, and having a positive Self-Esteem makes living more pleasant, peaceful and playful. It affects how you think, act and relate to other people in everyday living. Working on Self-Esteem is like watching the wind blow gray clouds away and seeing that blue sky and its bright sun smiling at you.

Work at it and eventually, you WILL smile back. :)

Author's Bio: 

Happily divorced, no children, volunteer writer for various online websites and a Mental Health Newsletter, born and raised in Ontario Canada. Unable to work due to 35 medical conditions, time is spent finding ways of studying and applying what would be studied at University. Life goal is to help people become the person they want to be and help them find happiness in spite of their circumstances. Hobbies include crocheting, playing piano, writing, reading, self-help, psychology, volunteering, cats, computers, music, painting, scrapbooking, beading adn more. The relationship between God and myself is the most important and valuable thing in my life. Without Him I'd be lost.