How do you build financial confidence?


Having had to defy my doubts countless times, I’ve learned that the best way to find the courage to silence the negative noise in my head is to turn thoughts into action. And I can confidently say every time I believed in my abilities, nothing stood in my way.

Conversely, lack of confidence leads to inaction—no matter how smart or well-prepared one may be. This is the challenge many women need to overcome.

Confidence counts for so much in life. It helps you get the dream job you want, take on the challenges others consider too hard and navigate the obstacles life can throw at you.

Are you feeling financially confident?

What is self-confidence? One definition is an individual’s trust in his or her own abilities, capacities, and judgments, or belief that he or she can successfully face day to day challenges and demands.

Over the years, much has been written about women and their lack of confidence. Studies have shown that women tend to doubt themselves more and back themselves less than men.

In the world of finance, this narrative has manifested itself by depicting women as timid, indecisive investors, insecure about their financial knowledge and the decisions they make with money. A study by Merrill Lynch pointed out that even among men and women with similar levels of financial knowledge, women are more likely to say they don’t know enough.

According to certified financial planner, Lazetta Rainey Braxton, one threatening mental block to financial confidence and freedom for women is “money FOG.” According to Lazetta, FOG means — fear, obligation, guilt — attacks women's sparkling minds and blocks healthy views on money. Money FOG also slows the progress you need to grow, keep and distribute wealth.

And it's not the level of their financial knowledge that's the problem, says personal financial expert Mary Hunt; it's their lack of confidence.

I have a theory.

As women, we set the bar impossibly high, so we inevitably feel inadequate. And we avoid taking action until we feel we’re better informed, better prepared and better qualified than anyone else. We watch men lean in, while we hold back until we believe we’re perfectly ready. Simply put, we are over-thinkers!


And I'm not wrong. Studies have shown that women’s ability to do personal finance well is deeply tied to self-efficacy, the belief that they are capable. Without that belief we won't do anything about our financial struggles.

I believe that the cornerstone for women is learning to risk and fail, and jettisoning our perfectionism. This is the only way we will get out of heads and be able to grow and develop our confidence. 

Reflect for a moment on how self-confident you think you are. Do questions about money or your finances make you feel inadequate? When you compare yourself and your financial capabilities with others, do you feel let down?

Just because you don’t currently feel confident about your money management skills doesn’t mean you can’t change that. I’m a big believer in changing your mindset in order to make long-lasting changes in your life. It’s a process that doesn’t happen overnight, but it has to be deliberate and consistent. And the good news is that your money mindset can improve just from taking small, easy steps. Finding those small solutions will help encourage you to keep taking more steps.

How do you build financial confidence?

1. Educate yourself.
I'm not talking about high-level investments. Understanding the basics of financial literacy, like how to budget or pay off debt, is the first foundational stepping stone to conquer. There’s a wealth of women-centric financial topics out there that you should learn more about, so read up on this and other current topics in the news. The more financially literate you are, the better your financial decisions and overall financial well-being.

2. Find your tribe. Start a money group. Studies have shown that women can learn better with others, and enjoy sharing. The group doesn’t have to be complex. Simply meeting once a month to discuss all things financial is a solid step to identifying and reaching your goals. Whether the subject is personal finance or health, remember, there is strength in numbers.

3. Talk about money unapologetically. The only way to break the stigma around money is to talk about it in a more open and honest dialogue. The more we talk about it, the less taboo it will become and the less alone we will all feel. 

Same ways as don’t need to be a dietician to eat healthy or an Olympic weight lifter to hit the gym, you also don’t need to be a “Warren Buffet” to start being in charge of your money. You can take charge now by taking action now. So bet on yourself. Defy those doubts. And in the end, you’ll be so glad you did. 

How do you build financial confidence? Share your story with me below or via @TheDisruptorsZA

0 Comments