- Emily Friday
5 Steps to Building Money Confidence
Building your confidence around money can feel like a long, challenging process - especially if you grew up with a toxic money mindset as a result of the conversations on money had around you.
You may have been conditioned to believe things like:
"I'll never have enough money"
"I'm just not good at saving money"
"Money and I just don't mix well!"
...You get the idea!
Unfortunately, these negative self-beliefs don't come without consequences - especially if you've been believing them for such a long time.
Limiting self-beliefs can keep us trapped in a vicious cycle of hopelessness when it comes to our finances - so in this week's blog post, we're listing some easy, actionable steps you can take to improve your confidence - and relationship - with money.
Here are four, easy steps to building money confidence:
1) Rip off the Band-Aid
It's time to face your finances!
If financial confidence is your goal, you have to face each and every aspect of your financial situation - good and bad. Understanding not only your current situation but also where you're heading if you continue these habits is crucial.
Practice acceptance of where you're currently at and make sure to cut the habit of avoiding your finances when stressed. Make it a part of your daily routine to check your bank balance, and review your outgoings regularly with a solid budget so that you aren't caught off-guard with sudden expenses.
2) Create a Plan
"A financial plan is like having your very own personal roadmap to your dream life".
Leading us nicely to the next step, creating a plan (and one involving a budget, if you haven't got one already!) is a simple yet effective strategy for dealing with money stress and building money confidence.
It's easy to feel lost and helpless when we don't have a well-thought-out plan in place, and this is even more true when it comes to our finances. Create a financial plan with a clear overview of where you are now/where you want to be in 1 year, 5 years, and even 10 years' time.
As @theminimuminvestor puts it, "a financial plan is like having your very own personal roadmap to your dream life". Read more about this in our post: The Roadmap to your Financial Goals.
3) Set up an Emergency Fund
If you haven't heard of the term "emergency fund" before, it basically refers to a pot of cash/savings account that you put aside for you to use only in the case of emergencies e.g. sudden redundancy at work meaning loss of income, or your car failing its MOT and needing to pay for repairs.
An emergency fund will help you avoid relying on credit cards or your bank's overdraft should an emergency arise in future. Relying on the latter will only push you further into debt and cause additional stress about paying the money back. Having an emergency fund in place will give you the confidence and reassurance you need that emergencies won't set you back!
4) Practice Compassion
In order to move forward on your financial journey, you will not only have to accept what went wrong in the past but also forgive yourself for it. Beating yourself up over past money mistakes serves no purpose, and having this toxic money mindset will only keep you from achieving your full potential.
Moving from a mindset of "I'm no good with money" to "My relationship with money is improving every day" will have profound effects on your subconscious and provide you with the confidence you need to achieve your financial goals!
5) Make the most of budgeting tools
Last but not least, make sure you're taking advantage of all of the great budgeting tools, resources, and FREE education that's out there!
Stay on top of your finances and build money confidence by regularly reviewing your spending using a budgeting app like ImageNPay. You can also use our app to top up your prepaid digital wallet so that you never go over budget or further into debt.
Find out more here about how a prepaid card can help you budget.
As for educational resources, there's an abundance of money-saving tips on Money Saving Expert, and with Clever Girl Finance you can actually join a FREE programme to improve your relationship with money.
If you're ready to start improving your money mindset and budgeting skills, the ImageNPay app could help.
With your very own prepaid digital card, you can top up with the amount you choose, track your spending, and improve your budgeting skills to gradually build your money confidence. Just tap the button below to find out more!
Be sure to also follow ImageNPay on Instagram for more money tips!