Having financial confidence doesn’t come naturally for any of us. Just like growing up, it is a reality that we sometimes have to grow into or become. Every person you look up to who seems so confident about their financial status wasn’t always that way.
At some point, they also avoided money talks and went mute whenever their peers talked about finances. However, the narrative changed over time because they chose to put in efforts into changing it! You can also do the same.
What Is Financial Confidence?
Let us get to know what financial confidence is. So let’s explain financial confidence separately, shall we?
According to Thesaurus.com, the word “financial” means “about monetary receipts and expenditures; pertaining or relating to money matters.”
Hence, the mention of the word financial in the context of a statement refers to money-related matters. Let’s take a look at the meaning of the word “confidence.”
According to Cambridge Dictionary, Confidence is “the quality of being certain of your abilities or of having trust in people, plans, or the future.”
Combining the separate meanings of both words implies that financial confidence is being sure of your financial status and your ability to make money via skills or investments of any form.
Your ability to be financially confident takes time and experience to build, just like financial freedom.
The more financial freedom you have, the more financially secure you become! The good thing is that it’s never too late to begin the journey, and although it might take a while, with the right mindset and efforts, you are sure to get there.
In this article, I will introduce ten simple tips, which, when used, will give you financial confidence as you apply them consistently.
1. Know Your Current Financial Position
Have you ever been opportune to use a map? If yes, you know that part of the advantages of using a map is that it will help you get a better grasp of your current position. This will assist you in making wiser decisions concerning your prospective destination if you have one!
The same applies to raising financial confidence. One of the many steps in knowing how to gain financial confidence is to be aware of your financial status.
The reason is that being aware of where you are on the map of your finances will help you find out what you need to get done to change your present status.
Ignorance has always been the reason why people fail. Therefore, the more conscious you are in this game, the better your chances of improving your finances.
Now, when I mean being aware of your financial status, I’m not referring to the amount of money in your bank account alone! I am referring to your skills, your knowledge, and your network.
Do you have skills that can earn you money and make you a more valuable person? What is the level of expertise for each of your skills? How many books have you read about finance and the ability to manage money? Who are your friends and colleagues?
Evaluating the above questions and answering them with a fair degree of certainty will be a huge pointer to where you stand!
So, the first step you should take to help you build your financial confidence is research. Spend your time learning and understanding your current financial position to find out what you can do to improve the situation!
2. Keep Records Of Your Financial Endeavors
Keeping track of your finances reveals two facts; competence and accountability. These are two attributes that every person who desires financial confidence and freedom must have.
On the other hand, your inability to keep proper records of your economic activities will make other people consider you careless and irresponsible. Moreover, it will make it difficult for you to deduce the direction in which your money effectively moves.
If you learn to keep your financial records, it will be easier for you to manage money. Why? Because your records are a vivid map of your cash flow. It is a clear representation of your expenses, income, assets, and liabilities!
With proper records, you can learn to cut off unnecessary costs and grow your skills so that you can earn more. The truth is that increasing finance-wise is impossible when you do not know how you use your money and if you spend it wisely or foolishly.
A person who keeps good records shows a better chance of resourceful spending and investment than someone who does not.
The reason for the financial confidence of certain people isn’t because of how much money lies in their bank accounts.
Instead, it’s because they are very sure and aware of every dime of the money they make or spend daily, weekly, and monthly! And that’s what builds financial confidence, knowledge!
If you desire financial confidence, you will have to become more accountable for every dime that you own, down to the smallest unit.
So, begin to keep track of your financial details. You can get a notepad that will allow you to write and edit those details. Every day, ensure you write down all your transactions along with dates and time details to match.
The date and time will make it easier for you to make future references to that day’s expenses. You can also add important information like a budget or a list of investments and owned assets to your notepad or journal.
Do the above consistently and watch how confident you will become in the next few months.
3. Budget And Plan Like A Business
Keeping and having proper records of all your financial histories brings you into the reality of the next step that you should take to build financial confidence; budgeting.
A good step you should not hesitate in taking to achieve financial confidence is learning the mechanics of budgeting. Budgeting isn’t just the act of planning how to spend your money.
Budgeting is the ability of a person to make wise spending decisions concerning their income and expenses levels such that they end up spending less and making more money!
However, most folks either lack this skill or are too poor at it, thus making it easier for them to spend carelessly and unnecessarily.
To be able to budget efficiently, you have to do away with thinking like a regular person. You have to think like a business! The goal of every business organization is to make profits. There are several tips on how to budget properly to build financial confidence.
If you are going to earn more money and build your financial confidence, you will also need to have the same mindset. An average business organization places a lot in increasing their income and profits and reducing as many expenses and expenditures as possible.
You must do the same! So the next time you are making a budget, do your best to make your expenses as low as possible and your investments higher. Doing so places you on a better financial pedestal, which boosts your financial confidence.
4. Save! Have An Emergency Fund
One of the reasons why most folks find it difficult to save is because of the wrong mindset they have about it. First of all, you don’t save to handle emergencies alone! Instead, you save money to take advantage of opportunities that could change your life forever.
Imagine a scenario where you get access to an opportunity that comes once in a blue moon, and all that is required is just for you to pay a small amount of money. If you can’t afford it at that moment, you lose it.
You can prevent scenarios like this from happening to you by keeping a part of your income separately. It’s called preparing for the rainy days.
Let me remind you of this fact; life happens. No matter how prepared we might be, there are circumstances that we might find ourselves that will be beyond our control. However, it is better to be ready when life happens.
Having an account dedicated to saving money could be the miracle you might need for a breakthrough or a life and death emergency.
You can start with a small percentage of your income—plan to save on a weekly or monthly basis and keep to it. Consistency is what makes saving money a result-yielding endeavor.
Another benefit of having cash saved for emergencies apart from its resourcefulness is that it gives you financial confidence and also makes it easier to relax, saving you from the mental and emotional strain of worry and fear.
5. Avoid Unnecessary Debts
“Every time you borrow money, you’re robbing your future self.”- Nathan W. Morris.
Read the following line at least thrice; Debt is never good. One of the primary reasons people never accumulate wealth or riches in any field is because of debt.
Debt has a crippling effect; it weakens your finance and makes it difficult for you to invest. Think of it as being a slave because that’s what debt does. It leaves you at the mercy of your debtor and keeps you vulnerable.
The subject of debt becomes even scarier when you are living off credit cards! If you are yet to have financial confidence, then credit cards aren’t for you! For your good, avoid them at all costs.
Why? Because credit cards do not leave you in control of your finances. Yes, the credit companies are in control of it. If you learn how to budget wisely and save consistently, too, you’d realize that you do not need a credit card for you to live comfortably.
Accumulating debt is similar to tying a massive boulder around your legs while you swim in the sea. It cripples you! Make efforts to ensure that you avoid any form of debt! No matter how little it might look, avoid debt!
6. Set Financial Goals And Work Towards Them
A proof of your intentionality is in the kind of goals you set and how you plan to achieve them. It is common for most folks to have goals for every other area of their life and leave out their finances, which is wrong!
The existence of goals is to help a person have a target at sight and help them put in the needed efforts to achieve them.
Part of the many ways you can boost your financial confidence is by setting realistic financial goals and putting in the needed efforts to achieve them.
Goals like deciding to read four books on investing every month or to save a specific amount of money every month are simple examples of financial goals that you can set and achieve quickly.
Money and confidence are usually found in the same environment. If you research correctly, you’ll realize that almost 80% of confident people on the Earth earn well or are experts on finance-related matters.
You can become as sure as you need to be about your finances when you decide to begin the process of working on your finance.
Here’s an excellent way to begin. Write down at least ten things in your journal that you think will help you make more money and become more competent on financial issues at the beginning of each month.
Then, put in the work and watch those goals turn into reality. If you become consistent, you could tick off at least 120 financial goals before each year runs out! That’s progress!
7. Take Financial Risks And Invest
“The more your money works for you, the less you have to work for money.” – Idowu Koyenikan.
Everyone desires financial freedom, but few know what it means. According to Wikipedia, financial freedom means “having enough income to pay one’s living expenses for the rest of one’s life without having to be employed or dependent on others.”
The road to financial freedom is a dangerous one, and for you to become financially free, you will have to be willing to take risks! Unfortunately, most people are scared of taking risks, and it has become the reason for their limitations.
One of the many requirements for building financial confidence is the skill of investing. It is through investments that we can be part of life-changing opportunities.
A person who has mastered the art of investment is bound to be financially confident. Not just because of the results alone but because of the gained experience that comes with investing consistently.
When you invest more, you get to learn and understand the dynamics of the niche you invest in regularly. Such makes it easier for you to make more accurate financial predictions, which will help you make better financial decisions.
A classic example of how effective investing and taking risks can be the arrival of Cryptocurrency. Many folks were skeptical about investing in Bitcoin at first when Satoshi Nakamoto released it in 2009.
But after a few years, Bitcoin began to increase in value, and it trended! Those people who took the risk and invested in it made millions of dollars, and most are now financially free!
The same could happen to you too! All you need to do is learn how to recognize and invest in the right business opportunities!
8. Consume Materials That Will Improve Your Financial Knowledge
Generally, confidence is a product of knowledge, awareness, and consciousness. The same applies to financial confidence.
Therefore, if you must become a person with financial confidence, you must become someone who devotes time to learning and constant improvement in the knowledge of finances.
The reason behind the timidity of most people when it comes to financial matters is ignorance. Take that ignorance away, and it becomes easier to become a financially confident person.
It is common for people to complain about not being a massive fan of books and reading. That’s alright. You can also check out short articles that can give you insight into building a more robust financial life.
Articles like the best finance books of all time can set you in the right direction to find audiobooks or eBooks.
The world today has evolved, and specific activities have become more accessible. An example is learning. You don’t need to sit with a book and read to gain knowledge.
Instead, the internet has made learning more accessible with specific apps and online platforms like YouTube, Ted, and Spotify. With those apps, you can watch tutorials, take courses on YouTube and Ted, or even listen to audiobooks via Spotify.
All you need to do to take advantage of is find the learning technique that works for you and stick to it consistently!
You are bound to feel more financially secure when you know more about investments, sales, and other money-related matters after finishing a course video on YouTube.
9. Be Aware Of Global Financial Occurrences
World occurrences can influence what happens in any continent. The earlier you learn to take advantage of it, the better. Part of the many ways of building financial security is being aware of every important economic event or activity.
It would help if you learned to keep up with trends in the stock market or your financial niche. Doing so keeps you ahead of others and makes it easier to access opportunities and make smart money decisions.
Think of it as the early bird conscious of every slight shift in the market and a plan to exploit. That bird will get the worm first! Information can be very beneficial to those who get access to it first and know how to take great advantage.
Therefore, you should begin to spend more time on internet news sources or the Tv channel for news at home. Follow up trends and informative pages on social media and research more about the latest happenings all over the finance world.
The more knowledgeable you are, the more confident and secure you become.
10. Have A Financial Mentor Or Accountability Partner
The people around us, like always, can influence us in ways that can seem unbelievable. An excellent way to boost and improve your financial confidence is getting a mentor or even an accountability partner.
The aim of having a mentor or an accountability partner is to receive guidance and access to their networks and opportunities for the sake of your financial status.
The presence of a mentor or accountability partner will keep you on your toes. In addition, it will help you learn specific values, such as responsibility, competence, accountability, and frugality.
The right mentor or accountability partner can be a source of motivation and help you navigate the corridors of certain decisions and influence the quality of investments you might make.
Knowing that you are learning from a person who can teach you how to manage your finances better can bring a certain kind of relief and comfort when you think about your financial life. You might not be there yet but are bound to feel more satisfied and contented.
Being financially confident doesn’t mean you have to be extravagant. You don’t have to be entirely out of debt or even own a passive source of income for you to enjoy financial confidence.
Being financially confident involves being comfortable and satisfied with your financial status irrespective of your environment. So that when you find yourself amid people who own more assets and earn more money, you won’t feel intimidated.
You see, there is a relationship between your self-esteem and money. You are bound to have better self-esteem when you earn more money or know more about finances.
Keep in mind that becoming financially confident is a process that takes time. And because I understand how significant growth is, I’m leaving a link to a product called Life Compass that can help you build a more prosperous financial life. Be sure to check it out here: Life Compass Workbook.
Cheers to a more sustainable financial life in advance!