Opinions expressed by Entrepreneur contributors are their own.
As inflation rises, financial confidence declines. According to a recent New York Life survey, 62% of Americans are financially confident, down from 69% in January. Given the current period of high inflation, Americans are faced with more financial uncertainty than ever before. But how can we combat this?
“Instead of worrying about what you cannot control, shift your energy to what you can create.” – Roy T Bennett.
This quote is easier to read than follow! However, in the spirit of regaining power in an economic market that can leave us feeling powerless, here are three great steps that can orient us toward a greater sense of personal and financial confidence:
- Make efficient decisions
- Follow through with a realistic plan
- Have the willpower to take control
As an investor, you cannot control the stock market or the rising gas prices. But you are in the driver’s seat with your self-awareness, self-assurance and self-determination. 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 attributes that are foundational to confidence. Building insight into these concepts can empower you to strive for financial freedom and help you thrive in all aspects of your life.
Setbacks and obstacles are why we stop in our tracks, as we often focus on the negative outcomes which stunt us. To feel growth, we need to see and believe in our abilities to succeed and progress.
One technique to help attain self-awareness is journaling. I know journaling feels like such an unrealistic task, but it doesn’t have to be an elaborate process if you don’t want it to be. It can be as simple as reaching for your phone to take notes when you see, hear or think about something that moves and inspires you. It really can be as easy as taking a screenshot of something that elicits deep emotion for you or jotting down a memory or reflection. The goal is to connect with thoughts and emotions within us that we would typically move on from. When we journal, 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 that has stored 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 have to give yourself the chance to create this growth by taking proactive steps toward building your self-awareness.
As you gather more information on a topic, you acquire more knowledge. Still, when it comes to Financial Self-Awareness (FSA), it is a little less about financial literacy in general and more about your financial situation. Many people can recite personal finance books or the ratios and formulas for excellent investment advice, but if you don’t know what your net worth is today, how can you make decisions about your future?
Take some time to jot down your past successes and failures with money; this will give you clarity on your “why.” Once you have reviewed and developed a deeper understanding of your financial history, you can move forward with making the necessary decisions to reach your present and future goals. This clarity and intentionality will assist you in building more confidence.
This level of self-esteem is not built around knowing you are always right; it’s about being able to get up after you fall and still move forward. We all have strengths, so leverage them and ensure you are implementing them daily. We also all have moments of doubt, and we can move forward by harnessing the moments of assurance from revisiting our accomplishments. When was your last moment of success? Think of anything from gathering the courage to have a difficult conversation with someone in your life to finishing a painting, a book or a degree. Accomplishments come in all sizes, so celebrate them and often remind yourself of your successes.
Historically, money has been a taboo subject, 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 made me look for more information and continue to learn and understand it. Most people don’t talk about it enough, which is one of the reasons why most people have poor money management skills. This then turns into shame and embarrassment, which can keep us from being honest about money and seeking the right help. The more you talk about money, the more comfortable you’ll feel; consistency is essential. Having a financial plan might sound like a hassle at first, but it will save you from multiple headaches in the future. A financial plan gives you a goal that you can track and ultimately increase your economic confidence.
Determination is usually tied to actions like “I am determined to learn another language, ” which requires steps to accomplish. This is precisely what self-determination is: building a set of skills to reach those goals.
What skills do you need to build on most? Here are a few to think about: Decision-making, problem-solving, goal-setting and self-advocacy. 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 gain fulfillment. Building life skills that escalate your knowledge allows for the independence you seek, and also increased relationships and interactions with others will 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 is 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 like apps and calendar reminders.
Looking to save more money? Use a budgeting app like Mint and schedule a time to revisit your budget regularly. A visual representation of your goals and progress will help you stay on track and motivated.
According to a National Bureau of Economic Research study, nearly 80% of women struggle with low self-esteem and shy away from self-advocacy at work. This means four in five women may be held back in their career advancement by a lack of confidence and visibility. Let’s change these statistics and help each other increase our confidence. Remember that applying these steps takes practice. Start with what feels most comfortable and move on to the next. Becoming financially and personally confident will enable you to trust your abilities to manage your wealth and life fruitfully. Once you deepen your self-awareness, self-assurance and self-determination, it will become phenomenally easier to make efficient decisions, follow them with a plan of action and move with conviction. While inflation creates uncertainty for many, your financial confidence need not be wavered by outside factors.