By William Moeller
Historically, people’s financial success has been measured by results.
But, without a doubt, there is a link between the way someone thinks about their money and their ultimate financial results. Financial confidence is one of the best predictors of overall financial wellness.
What is Financial Confidence?
Financial confidence is knowing that you have power over your finances. When you’re financially confident, you trust your ability to make the right decisions to successfully manage your money.
How to Improve Your Financial Confidence:
1. Replace negative beliefs about money with positive ones
Reject subconscious beliefs that inhibit growth of your financial well-being, such as:
• “We’ll never have enough money” VS
“We are having fun finding places to invest our money!”
• “There’s not enough to go around” VS
“We have an abundance of money!”
• “Money doesn’t grow on trees” VS
“Money keeps growing in our bank account!”
Identifying negative beliefs you have about money is the first step to changing them.
2. Educate yourself
Financial literacy — or the understanding of financial concepts and skills — is the very essence of financial confidence. When you understand finances, you begin to feel more confident about all your financial choices. You no longer have to feel like you’re just guessing your way through managing your money.
3. Employ the right tools and create a financial plan
Utilizing the proper financial tools will help you build financial confidence. Composing a written financial plan is fundamental to removing financial anxiety and replacing it with confidence. It sets priorities, develops accountability, and keeps you on track. You can plan for retirement and ensure that you aren’t getting stung with hidden fees.
4. Build an emergency fund
Having an emergency fund in place boosts your financial confidence by freeing your mind to focus on more constructive things. Having the funds to handle an emergency eliminates the fear of being without them.
5. Focus on financial products that have guarantees
When most people think about improving their finances, they think taking more risk is the answer. But providing growth, along with safety of principal guarantees, will improve your results and help you achieve financial confidence.
What would happen if you set a huge financial goal for yourself and then end up taking a loss? Suddenly, you’re suffering a total lack of confidence. You might give up on trying to improve your finances altogether. But, alternatively, what if you set a goal of improving your financial scorecard, while at the same time, guaranteeing your safety? It’s a goal that you’re sure to reach – building confidence in yourself and your decisions. You begin to see yourself as someone who follows through on their goals. And then, when you do start to set bigger goals, you feel more confident in your ability to meet them.
6. Talk about money
The more you talk about your successful financial decisions with your friends and family, the more comfortable you’ll feel with money overall and you’ll develop an eager support system for financial topics.
7. Seek advice from an expert
Financial confidence isn’t necessarily about knowing everything there is to know about money. In fact, some of the most financially confident people diversify parts of their retirement portfolio to products they know will protect and enhance their overall investment strategy.
If you’d like to do some investing, but you don’t know where to start, get the help of an experienced professional and you’ll feel more confident.
Getting the help of a financial professional who knows how to add value to your assets, while keeping your money safe, will mean that you won’t have to know everything about investing and won’t have to go it alone. And knowing that your investments will succeed without risk will make you feel more confident.
Confidence starts with having a plan. Map out yours today.