Four Steps to Financial Confidence

For a good deal of my life I lived under a dark cloud of worry that I would end up financially destitute — a bag lady.

A survey conducted by Harris Interactive for Allianz Insurance Group reveals that I’m not the only one. In fact, most of us have felt that way at some point in our lives, not because we’re broke, but because we don’t have confidence that we know how to hang onto our money. And that makes us timid, worried and financially insecure.

Financial confidence is a choice. It’s a matter of changing bad habits and choosing to learn simple financial principles. Then by consciously applying them over and over those principles will become automatic responses — financial habits. 

Here are four simple things you can do starting today to improve your financial confidence — and take control of your money.

1. Get angry

Debt is the pits. It eliminates your options, keeps you awake at night — can make you lie to your creditors, even lie to your spouse. I know. I’ve been terribly, worse than horribly, in debt! 

So what are you going to do about it? Whine? Complain? Feel sorry for yourself? I have a better idea. Get mad! 

Decide once and for all that you will not sell your soul to the likes of MasterCard and Visa — not one more day, not one more purchase. Get righteously indignant at the very idea of transferring your future wealth to them. Decide right now that you will do whatever it takes to get out of debt.

2. Become a saver

Saving money is like magic because it changes our attitudes and calms our fears. 

I can honestly say that I saved my way out of a six-figure pile of debt. Knowing I had cash tucked away in a safe place quieted my insatiable desires. That is where I found my determination to stick with repaying the debt. As long as I knew I had some money to call my own, I was willing to go to great lengths to repay the debt. And in the process I gained financial confidence and security. 

Start with a dollar and stuff it in a coffee mug if that is all you can manage. Then make it $5. Soon you will be saving $10, $20 even $50 a week, plus all the change from the sofa cushions and washing machine. 

It is not a requirement that you have your own paycheck to become a habitual saver. Whatever money you manage — the grocery money, the household account — whatever it is, take some of it right off the top for savings.

3. Make it automatic

Setting up a plan where you have money automatically transferred to your savings will move your financial confidence to a new level. Fill out an automatic deposit authorization form at the bank or credit union where you have your household account. Here’s the principle: If you don’t see it, you don’t miss it.

4. Set a financial goal

Perhaps your financial goal is to repay your credit-card debt. Excellent! You need a plan. My Rapid Debt-Repayment Plan (RDRP), which is one of the pillars of Debt-Proof Living, is the best plan you’ll ever find because it creates a reasonable way to get out of debt.