Today we are going to talk about money confidence- why many of us don’t have it and how to get it.
First let’s start with what money confidence is. Confidence, as in self-confidence is a state of being. It’s about trusting yourself. Having an inner knowing that you have your own back. You do what you say you will do, you follow through and if it all goes to shit you back yourself and compassionately lift yourself back up and try again. You don’t beat yourself up and therefore you are willing to step out of your comfort zone and give it a go.
According to my iMac dictionary App confidence is:
the feeling or belief that one can have faith in or rely on someone or something.
The state of feeling certain about the truth of something
a feeling of self-assurance arising from an appreciation of one’s own abilities or qualities.
My interpretation of money confidence is feeling a sense of self- assurance that when it comes to money, you have your own back.
You feel certain that you can rely on yourself to make money and manage money. You will follow through on what you say you will do and even if you find yourself in a pickle, you trust that you can rely on yourself to work it out.
Money confidence doesn’t mean you have to know everything about money but it is a confidence in yourself that you know how to figure it out and will pick yourself up again if you stumble.
You make decisions about money from a place of trusting yourself and your decisions. That doesn’t mean you won’t make mistakes but you don’t let the fear of getting it wrong or the thinking you ‘don’t know enough’ hold you back from making decisions and moving forward. When you have this confidence you can move forward without knowing exactly how, as you have the confidence in yourself that you will figure it out or learn from your mistakes.
Let's talk about how you can develop money confidence.
Step 1. Take action!
Do the thing. You have to start by taking steps to manage your money and create more. Confidence in your abilities can be developed by doing the ‘thing’. If you want to invest in shares but you don’t know how or you are too scared to; you’re not going to build your confidence by doing nothing. You might stuff it up. True, but you are creating situations you can learn from. And when you learn from your mistakes, guess what? Next time you know what not to do and you build a little confidence.
Step 2. Read a personal finance or money mindset book.
Expose yourself to people who have paved the way before you. Learn from people already doing what you want to do. There are SO MANY great books about money that you can learn from on a wide variety of topics from simple systems to manage your money, to advance investment and business strategies. If you are not a fan of reading, get an audio book. Just immerse yourself in the topic of money. Become familiar with it. Expose yourself to that many books that it start to feel like a familiar topic you feel comfortable with.
Step 3. Apply what you learn
It’s all very well to read a book. And don’t get me wrong I am a HUGE fan of reading and would happily sit around reading all day long if I could. However, if you don’t apply want you learn, you are just consuming, being entertained if you will. You need to pick something from the book, even if it is just one thing and try it. See what happens.
Does it work for you?
Is it something you want to continue?
By applying what you learn you are building that money muscle. And your money confidence.
Step 4. Learn by doing
This goes hand in hand with step 3. I had a small hiccup with the podcast a few episodes back where apple podcasts didn’t include the words Money Mindful in my podcast title which made the podcast title not make sense. I didn’t know that they wouldn't include the name of the podcast in the title. I had to learn by doing. Now I know.
When it comes to investing in property or other forms of ‘passive’ income, there are so many things I didn’t know until I did. Simple because I took action towards creating a passive income and then learnt along the way. You can read books or listen to podcasts until you are blue in the face but at some point you have to do it yourself and figure it out along the way. You will get better at it, and for sure, you will build your confidence.
Step 5. Be prepared to make mistakes
You are going to make mistakes. Expect it and learn from it.
If you are out there, in the arena as they say, investing in property or starting a business or committing to a long term retirement plan, whatever it is, at some stage you are going to make a mistake or lots of mistake. So what?! What are you going to make it mean? Nothing I hope, except that you are learning and growing, full-stop.
This is how we learn.
The important thing is to be fully aware that this is a natural part of developing confidence and growing in all areas of life. Embrace the mistakes, learn from it and move on. Have you ever seen a little kid fall over or try something new like using a knife and fork. They don’t make one mistake and then decide that’s it I’m no good at this. Of course not. They just pick themselves up and go again. No big deal.
Step 6. Talk about money
Reach out to your people. Talk to your partner, your best friend, your kids or anyone who will listen. I used to feel really awkward talking about money. Well, just start a podcast and talk about it every week! That will cure any awkwardness quick smart. No, in all seriousness, by talking about money it just becomes the norm. Nothing unusual here. It just feels normal and before you know it, you feel natural and confident talking about it. If you don’t have people in your immediate circle you feel like you can talk to, join a face book group or follow people on Instagram. You can search on either of the platforms using words like 'debt free community' or 'money mindset' or 'investing' and you will find groups you can join and people you can connect with.
Step 7. Practice makes perfect or good enough
Just practice healthy money habits. Then practise and practise some more until you are so darn good at it you can’t believe you ever thought you were bad with money or had no confidence with it.
My daughter is a gun on her peddle bike. She loves doing little burnouts and skids. She is so confident on her bike. She started on a three-wheel pushbike that she could hardly steer on her own. Then she moved up to a two-wheel pushbike. She was pretty awkward at first and fell off and stacked it more times than I can remember. She mastered that and then moved on to a pedal bike. Again she was pretty wobbly at first and used the training wheels for a day to get the hang of it until voila she got the hang of it. Imagine if at any one of those stages she had said 'that’s it, I’m no good at this' and gave it up. I think we forget as adults that we are not instantly good at new things. If you’ve always been bad with money and don’t know how to manage it, what are you making that mean? It means nothing except that you haven’t learnt how to do it and don’t have confidence with it. Again, so what? Now you are going to learn. You are going to fall down a couple of times and get back up again.
That’s how we do it. That’s how you build the money confidence, you just do it.
Step 8. Apply what I taught you today
And for those of you paying attention this is really just step 3 repeated.
Talk to someone, pick up a book and read it. Practice, fail and get back up again, learn from the mistake. You will be amazed at the difference it makes to your money confidence.
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