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When inflation rises, financial confidence declines. According to a recent New York Life Survey, 62% of Americans are financially confident, up from 69% in January. Given the current period of high inflation, Americans are facing more financial uncertainty than ever before. But how can we counteract this?
“Instead of worrying about what you can’t control, shift your energy to what you can create.” -Roy T Bennett.
This quote is easier to read than to follow! In the spirit of regaining power in an economic market that can leave us feeling powerless, here are three major steps that can orient us toward a greater sense of personal and financial confidence:
- Make efficient decisions
- Continue with a realistic plan
- Have the willpower to take control
As an investor, you have no control over the stock market or rising gas prices. But you are in the driver’s seat with your self-awareness, self-assurance and self-determination. Self-confidence is about acceptance and belief in your strengths, skills and abilities. It is not innate; it can be grown and refined over time.
Here are three guiding traits that are fundamental to trust. By gaining an understanding of these concepts, you can strive for financial freedom and thrive in all aspects of your life.
Setbacks and obstacles are why we stop in our tracks because we often focus on the negative outcomes that hinder us. To feel growth, we must see and believe in our ability to succeed and progress.
One technique to achieve self-awareness is to keep a journal. I know keeping a journal seems like such an unrealistic task, but it doesn’t have to be a complicated process if you don’t want to. It can be as simple as grabbing your phone to take notes whenever you see, hear, or think something moves and inspires you. It really can be as simple as taking a screenshot of something that evokes deep emotions or writing down a memory or reflection. The goal is to connect with thoughts and emotions within us that we would normally leave. If we keep a diary, we give them space to develop. I keep a notes tab on my phone, a physical journal on my nightstand, and a photo folder on my phone with quotes, photos, or videos that inspire confidence and motivation in me.
Another technique can be as simple as setting a time every morning, even just one minute, to be reflective and set an intention for yourself for the day. There is no wrong way to start. You must give yourself the opportunity to create this growth by taking proactive steps to build your self-awareness.
Related: Why It’s Time To Dust Off That Diary
As you gather more information about a topic, you acquire more knowledge. Still, financial self-awareness (FSA) is a little less about financial literacy in general and more about your financial situation. Many people can provide personal finance books or the ratios and formulas for excellent investment advice, but if you don’t know what your assets are today, how can you make decisions about your future?
Take the time to write down your past successes and failures with money; this will give you clarity on your ‘why’. Once you have reviewed and better understand your financial history, you can move on to making the necessary decisions to achieve your current and future goals. This clarity and intention will help you build more confidence.
This level of self-esteem is not based on the knowledge that you are always right; it’s about being able to get up after you’ve fallen and still move forward. We all have strengths, so take advantage of them and make sure you apply them daily. We also all have moments of doubt and we can move forward by taking advantage of the moments of certainty by reviewing our achievements. When was your last moment of success? Think of everything from musting up the courage to have a difficult conversation with someone in your life to finishing a painting, book, or diploma. Achievements come in all shapes and sizes, so celebrate them and often remind yourself of your successes.
Historically, money was a taboo, especially for women. I grew up thinking it was rude or inappropriate to talk about money. As I got older, I (thankfully) stopped following that rule, which left me looking for more information and continuing to learn and understand it. Most people don’t talk about it enough, which is one of the reasons most people are bad with money. This then turns into shame and embarrassment, which can prevent us from being honest about money and seeking the right help. The more you talk about money, the more comfortable you will feel; consistency is essential. Having a financial plan may sound like a hassle at first, but it will save you several headaches in the future. A financial plan gives you a goal that you can follow and ultimately increase your economic confidence.
Related: 12 Ways to Boost Your Confidence in 2022
Determination is usually linked to actions like ‘I am determined to learn another language’, which require steps. This is exactly what self-determination is: building a set of skills to achieve those goals.
What skills do you need to build on the most? Here are a few to think about: decision making, problem solving, goal setting, and self-help. Psychologists Edward Deci and Richard Ryan developed a theory of motivation that suggested that people tend to be driven by a need to grow and be fulfilled. Building life skills that increase your knowledge will provide the independence you seek, and increased relationships and interactions with others will also lead to high self-determination.
Related: How Resilience Led Me to Success
Take control of your financial journey by allowing yourself flexibility. Confidence is about understanding your strengths and weaknesses, which change over time. It’s okay not to be an expert in all things finance; there are experts in the field who outsource help from others. Stay on top of your finances using financial tools such as apps and calendar reminders.
Want to save more money? Use a budget app like Mint and schedule a time to review your budget regularly. A visual representation of your goals and progress helps you stay on track and motivated.
According to a survey by the National Bureau of Economic Research, nearly 80% of women struggle with low self-esteem and don’t shy away from themselves at work. This means that four in five women may be hindered in their careers by a lack of self-confidence and visibility. Let’s change these stats and help each other build our confidence. Remember that applying these steps takes practice. Start with what feels most comfortable and move on to the next. By becoming financially and personally confident, you can rely on your abilities to fruitfully manage your wealth and life. Once you’ve deepened your self-awareness, self-assurance, and self-determination, it becomes phenomenally easier to make efficient decisions, follow them with an action plan, and move with conviction. While inflation creates uncertainty for many, your financial confidence doesn’t have to be dented by external factors.