Financial confidence plays a crucial role in making wise and informed money decisions.

A 2023 NerdWallet survey revealed that three-quarters of Americans lack confidence in their finances.

A major factor was the uncertainty in the U.S. economy.

Summary: Wealth Inside and Out® Podcast – “Financial Confidence and a Secure Financial Future”

Overview of what you will learn:

>> (11:47) Understanding confidence with money
>> (12:20) Why millionaires often go broke
>> (13:47) Free financial resources to help you gain more knowledge
>> (14:30) How to create goals so you can achieve them

Hi, my name is Annette Bau (bah oo).

I’m a Certified Financial Planner™ and founder of The Millionaire Insider®.

This is the Wealth Inside and Out® Podcast.

Today we will cover:

• Define financial confidence
• Show you how to increase it
• Share challenges that a lack of confidence may cause you

Confidence Defined

Merriam-Webster’s definition of confidence is a feeling or consciousness of one’s powers or reliance on one’s circumstances.

Now, let’s review confidence with money.

Financial Confidence Defined

Experts define financial confidence as the belief in one’s money-related abilities.

Your confidence in life and with money is critical and often overlooked.

When we lack confidence, it erodes our desire to succeed, often translating to diminished financial success.

Challenges in Attaining More Confidence

Despite its importance, increasing our belief that we can do it can be challenging.

Add in economic and job uncertainties, and it can create a feeling of overwhelm and even depression.

To address this, individuals need to take proactive steps to boost their confidence with their money.

Problems of Overconfidence

While confidence is essential in all areas of life, a lack of knowledge combined with overconfidence can be disastrous.

Overconfidence often stems from misinformation on social media or individuals trying to sell you something.

12 Steps to Grow Your Financial Confidence

1. Educate Yourself

Education is a great way to increase your knowledge and ability to handle your affairs.

• Read books, attend workshops, and take online courses to enhance your financial literacy.
• Stay informed about financial news and trends.
• Learning the fundamentals of budgeting, saving, and investing is a great start.
• Enrolling in a local or online course can also be helpful. The U.S. government’s Office of the Comptroller of the Currency offers a free Financial Literacy Resource Directory.

In addition, financial communities, both offline and online, can also be helpful.

2. Set Clear Financial Goals

• Define short-term and long-term life and financial goals.
• Our life goals can help us stay on course to achieving our financial goals.
• Break down larger goals into smaller, more manageable steps. This simple action can make goal setting easier.

3. Create a Budget

• Develop a realistic budget that reflects your income, expenses, and savings goals.
• Track your spending to ensure you are staying within budget.
• Celebrate wins as you achieve your spending plan number. For example, take off Friday afternoon to get a massage or to play golf.

4. Fund Your Emergency Reserve

• Build an emergency reserve to cover unexpected expenses. This provides a financial safety net, increasing money confidence and reducing financial stress.
• Most experts recommend 3 to 6 months of living expenses as a reserve.

5. Reduce Debt

• Develop a plan to reduce or eliminate debt.
• Begin by paying off high-interest debts and loans.
• Find part-time work to pay off your debt faster.

6. Invest Wisely

• Understand different investment options available to you. Allocate your portfolio based on your risk tolerance.
• Create streams of guaranteed income. Having enough income to cover your expenses will likely increase your confidence with money.
• Consult with a financial advisor to align your investments with your goals and risk tolerance.

7. Review Finances Regularly

• Periodically review your financial goals and adjust them as needed.
• Assess your budget, and debt repayment strategies regularly.

8. Negotiate and Save

• Negotiate bills and expenses to save money where possible.
• Shop around for better deals on services and products.

9. Hire a Financial Advisor

• Consider hiring a professional. The right financial advisor will have the confidence and know-how that you lack.
• Confirm the financial advisor has a fiduciary duty. This means they have to act in your best interest.

10. Celebrate Financial Milestones

• Acknowledge and celebrate your financial achievements, no matter how small. This positive reinforcement can boost your confidence and motivation. Some people take career breaks (i.e., a sabbatical) when they hit a financial milestone.

11. Continue to Learn and Grow

• Growing and learning are essential in increasing confidence in our lives.

When we take the time to increase our knowledge, we can make better decisions with our money and lives.

12. Find a Financial Partner

• Enrolling a peer or friend with common financial goals can help boost your confidence. You can support each other in getting back on track when you get off course. Many people report feeling better when they have someone to help them stay on track.

Conclusion – “Financial Confidence and a Secure Financial Future”

Financial confidence is integral to navigating your financial affairs.

Increasing money confidence is essential to securing a future and retirement you love.

Financial education, responsible money management, a healthy money mindset, and support from a professional will help you feel more secure. They will also help you to increase your confidence with your money.

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Disclosure

The Millionaire Insider® copyrights all materials and intellectual property.

This information is for educational purposes only. It is not intended to replace the advice of any advisor or specialist, nor to provide investment, financial, tax, retirement, planning, or healthcare advice.

Always consult with a qualified professional before making any financial decisions or changes.

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