Key Steps to Build Confidence in Your Finance

When you’re struggling with money, financial confidence is usually nowhere in sight. This could very easily lead to spiraling out of control and getting yourself into a worse position with your money.

Why Financial Confidence Matters

Your relationship with money will impact how you behave with your money. That means that the more confident you feel about managing your money, the better you’ll do so.

Here are some things that are certain:

• Emotions play a much bigger role in money than you might think.
• Our family history impacts how we behave with money.
• The way we think about money determines how we will act with our money.
• Sometimes, we’re the ones holding ourselves back.
• If you don’t think you can do it, you won’t try to do it.
• If you think you’ll always be “bad” with money, you’ll keep making the same bad decisions.

Many of us don’t ask for what we want because we don’t believe we deserve it.
Many of us get stuck in the cycle of debt because we don’t think we deserve better.
We feel isolated from others because we think we are alone in our financial struggles.

Decide what you want your money to do for you.

To make your dreams a reality, you need a plan to pay for them. The first step is setting your goals. What do you want most? A college fund for your kids? An early retirement? Maybe a vacation home near that little stretch of beach where you honeymooned? Prioritize your goals as either critical, need, or want, and make them specific and actionable—if they’re too abstract, it will be too easy to deviate from them. Once you know what you want, you can plan how to make it happen.

Do this today: Write down your goal. Research shows that people who do this are more than 40% more likely to turn goals into reality.1 So grab a pen and paper and describe your dream.

Build up some courage.

Once you commit, you start to build up courage in the process. Courage doesn’t always come before you start your commitment, it builds as you step out in faith.

Courage, like commitment, can also be very scary and often doesn’t feel fun because you might not feel like you’re making any progress.

If you think of it in terms of working out, courage is the burn you feel when you’re pushing yourself to the max. The burn doesn’t feel good and you might not see results the next day, but there is progress being made.

When we were paying off our debt, I could remember feeling like I was making good money while I was deployed, but we didn’t really have a lot to show for it. This was largely in part to the fact that a lot of our money was being applied toward all our debt.

To be able to make it through the courage stage, you have to have some sort of measurable goal so that progress can be tracked. Tracking your progress will deepen your commitment as you begin to acquire capabilities leading to success.

Pay off one loan or credit card

Ever feel like you’re throwing money at your debt, but the balances never seem to go down? Instead of trying to pay them all off at once, direct your energy (and extra money) at one debt, while making the minimum payments on the rest.

You can tackle your debt in order from the smallest to largest balance to net some quick wins, or get rid of your most expensive debt first by focusing on the account with the highest interest rate.

Tackling debt in a disciplined way will put you back in the driver’s seat with your money.

The moral of this blog post is that knowledge is power. The more you understand about your own finances, the more in control you will feel. That control will then lead to confidence. You don’t have to become a completely different person in order to feel more confident about your money, you just have to start implementing small changes over time.