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How to Build Financial Confidence

Financial confidence is the key to achieving your goals. The process to develop financial confidence starts with having a clear idea of what you want from your finances in the future. In this blog post, we will discuss how to create financial goals that work for you and learn about the steps needed to reach them.

You may be wondering “am I confident in my financial future? Will I be able to achieve the goals that matter to me?” 

Financial goals are difficult. Some of them are short term. But some of them may be so far in the future that it is difficult to stay connected to them. What complicates this further is that every life stage brings different financial goals. It is important to set financial goals that are in the right time frame for you.

Another common question is “What do I need to become financially confident?” It all depends on what your current situation looks like and where you want to be in the future.

There are 4 steps to developing financial confidence.

  1. Commitment
  2. Courage
  3. Capabilities
  4. Confidence

Commitment:

Developing financial confidence starts with committing to a future goal. The most important part of commitment is being clear about the goal that you want to achieve.

A good framework to follow for creating a goal that you can commit to is the S.M.A.R.T. framework.

Specific: The first step is to be very specific about the goal you want to achieve. The more specific the better, because it creates more clarity around the goal you want to achieve.

Measurable: It is important for your goals to be measurable because this will allow you to track progress and ultimately let you know when you have achieved that goal.

Achievable: Your goals must be achievable, but also challenging at the same time so that you can push yourself and grow as a person in the process of achieving it.

Relevant: Your goals should not only be relevant based on what’s happening right now, but also based on where you want to be in the future. This will help ensure that your goals are sustainable and not just a short-term fix for something deeper.

Time-bound: It is important to associate a time frame for your goal so that you can track progress. A deadline will keep you focused and consistently working toward the goal.

It is also important to have an important “why” behind your goals to help you stay motivated.

Courage:

Courage is about taking a step outside of your comfort zone to do something more difficult than you thought you were capable of. It is about overcoming the negative thoughts that may be holding you back.

Financial goals are not achieved by being complacent, so it is important to be courageous when setting your goals and making the sacrifices you need to make for them to come true.

Courage can also mean confronting negative thoughts about money, which may be holding you back from achieving your financial goals. Whether these thoughts are coming from your parents, society, or other sources, it is time to release them and move forward with what you know is right for you.

Capabilities:

As we challenge ourselves and work toward our goals, we naturally develop capabilities. Capabilities only come because of work, practice, and pushing ourselves beyond our current abilities. Capabilities naturally develop when we do the challenging work of taking on commitment and courage.

Developing your abilities, especially when it comes to money, will give you more control over your life and allow you to achieve what matters most to you.

Confidence:

Financial confidence starts with setting goals and committing to them. Financial confidence is the result of having a clear idea of what you want from your finances in the future, taking steps outside of one’s comfort zone, developing capabilities through work and practice, and building courage as we push ourselves beyond our current abilities. The process for developing financial confidence may seem challenging at first but it can be done by following these 4 key components: commitment; courage; capability; and finally, confidence.

If you need help building your financial confidence step by step, click here for our podcast, or subscribe to our weekly newsletter WealthSmarts.

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