Do you feel uncomfortable dealing with money? You’re not alone. Many people struggle with financial confidence. When you get down to it, financial confidence is related to your money mindset, or how you look at things through a financial lens. Your financial confidence has to do with a number of factors including the way that you were raised as well as your experiences with money. Improving your money mindset, and financial confidence, however, is critical for solidifying your financial future. Here are five tips to help you grow in this regard:
- Understand your psychological influences. Your upbringing and past financial history have a big impact on your money mindset. If you don’t feel like you’re someone who’s great with money, try to figure out exactly why that is. Think about what your parents or caregivers might have told you about money and how it has affected you. Perhaps they taught you that it was the root of all evil or maybe there was never enough of it when you were growing up. Look at your financial past as well. Did you rack up a lot of credit card debt or fall into any unhealthy purchasing patterns? You have to recognize your old way of thinking in order to turn it around.
- Address financial fears and money taboos. Maybe you are worried about living paycheck to paycheck or not having enough money to retire comfortably. Try to find a way to prevent your fears from unfolding- develop a financial plan and begin to actively combat them. Be sure to look for money taboos that you may have picked up along the way as well (such as considering talking about money impolite). You should strive to become more comfortable and confident when speaking about money. It’s not impolite; it’s necessary. You need to be able to discuss money to become financially competent.
- Teach yourself to love money. Think of money as something that should be adored. You are not greedy or selfish for wanting more. Money is something that we all need to be stable, secure, and to be able to take care of ourselves and others. Drop any negative feelings you have about it and teach yourself to really love it.
- Lose financial baggage. We all have negative terms in our vocabulary related to our monetary status. Ditch words like “poor,” “snobby,” or “irresponsible” when talking about the financial situation of yourself or others. These negative words aren’t doing your finances any good.
- Budget and cut costs. Nothing can help you improve your money mindset and financial confidence more than getting a good budget going and cutting costs. This starts with a strong analysis of your current spending and then identifying those areas where you can improve. Where is most of your money going? Too many trips to the mall or coffee shop? What is necessary and what is not? Think about why you are making purchases and what you can eliminate. Is there anything that you can do less expensively? Can you shop at a cheaper store or buy less of something? Make a plan to pay off your debts and stick with it, too. Be sure to factor savings in as well. Put money aside regularly, bootstrap, and do as much as you can yourself. Your savings account will thank you for it.