4 Common Financial Confidence Killers — & How To Quash Them

Illustrated By Mallory Heyer.
By Marisa Torrieri 

In most areas of your life, you probably feel pretty confident. Perhaps you’re a pro at giving presentations in front of a boardroom. Karaoke in front of coworkers? You were the baritone in your college a cappella group.

But, there may be one part of your life that leaves you feeling a little unsure: your finances. And, you wouldn’t be the only one. When asked to describe their financial confidence, fewer than one in 10 respondents to a national poll said that they had a good grip on their money, while one in four felt like they didn’t know what they were doing — at all.

This just goes to show that it doesn’t matter how much you make: Money is an equal-opportunity confidence breaker. And, there may be certain parts of your money life, like saving for retirement or dealing with debt, that make you feel all the more unsure — even if you have a financial plan in place.

To help you tackle some of the most common insecurities, we rounded up top behavior-change pros to explain the key ways that finances can strike fear in our hearts — and then culled tips from them for regaining your confidence. Think of it as putting your mind over your money. 
Illustrated By Mallory Heyer.
Financial Insecurity #1: Feeling Deprived By Budgeting

How It Saps Your Confidence 
While budgeting is meant to help give structure to your spending so you can live within your means and meet your financial goals, it can also make you feel like you’re on a money diet. One bad month of overspending, and you start to feel as guilty as the dieter who regrets those few extra slices of greasy pizza after stepping on the scale.

“Budgeting can lead to a lot of guilt, and it’s [often because it’s] a backward-looking process,” says Atlanta-based financial advisor Russ Thornton, explaining that a lot of people start out confident and with the best of intentions — but start the self-blaming when they realize they’ve failed to meet their own standards.

“That leads to a lot of guilt and [asking yourself], ‘Why did I do that?’” he says.

Related: The One-Number Strategy: A New Approach to Budgeting

How To Give Yourself A Confidence Boost
It’s all about remembering to accentuate the positives. “It’s not about what you can’t have, but what you can spend,” says Susan Bross, a financial counselor based in Eugene, Oregon, and San Rafael, California, who specializes in spending management.

Maybe you’ve cut back on your weekday takeout, but you’ve allowed yourself a Friday-night dinner out with your significant other that caps off a hard week — a weekly expense that carries more personal significance.

It’s also important to work fun spending into your budget, whether it’s allotting yourself a few dollars a week for a small, no-strings-attached indulgence or diverting a small monthly amount into a “fun” savings account for a bigger splurge — like season tickets for your favorite hockey team.

“Build [fun money] into your plan, because it is a necessary part of budgeting,” Bross says. “When people work [so hard] to not spend money on things they don’t consider a ‘need,’ they run the risk of reacting to a sense of deprivation — and spend a larger amount than usual because the pressure has built up from feeling deprived.” 
Illustrated By Mallory Heyer.
Financial Insecurity #2: Feeling Crunched By Credit

How It Saps Your Confidence
Credit card debt can provoke anxiety when it starts to feel like you’re never going to crawl out from under your past money mea culpas, like impulse purchases from your less fiscally responsible years that are compounded by a sky-high APR.

"The fear is that [debt from credit cards] can snowball and get out of control,” says Brookfield, Connecticut-based psychotherapist Judith Barr, who specializes in financial counseling. “Some people won’t even have them because…once they’ve made a mistake and gotten into [a lot of] debt, they’re afraid they’re going to do it again.”

That may be why many people proactively try to put the kibosh on credit cards: A Harris Poll found that nearly one in five Americans successfully got rid of one or more of their credit cards last year, naming it as one of their top financial goals.

How To Give Yourself A Confidence Boost
If you’re a consistent over-spender who finds it much too easy to swipe now and pay later, you’ve got to get over your perception of plastic as “free money.”

Bross often uses this exercise to illustrate the burden of credit card debt to clients: “I tell them to picture the debt as a big boulder that they have to drag around. Would they choose to make it bigger?” For most of us, that answer would probably be a resounding “No!”

Then, when they’re getting ready to hit the register, Bross asks them to “consider the purchase as though it were coming directly from their savings account — is it still worth it?” Once you mentally tie the plastic purchase to your hard-earned dollars, it can make it easier to walk away from unplanned credit card spending.

Of course, sticking to a thoughtful repayment plan will be the most direct way to feel in control of your debt. So once you’ve calculated a target monthly amount that works within your budget — even when you can throw more at it — be sure to stick to the plan. Otherwise, you run the risk of throwing your budget out of whack and restarting the whole debt cycle.

"The illusion is that by throwing large amounts of money at the debt, you’ll pay it off faster, but without careful calculation, you might very well have to use the credit cards for expenses later — and that feels really crummy,” Bross says.

Related: Credit Crutch: 1 in 5 Americans Depend on Plastic

Illustrated By Mallory Heyer.
Financial Insecurity #3: Feeling Saddled With Student Loans

How It Saps Your Confidence
Your student loans can make you feel like you’re reliving your college years over and over again — and not in a good way. Even if you loved your alma mater, you may not be so happy about graduating with $28,400 in loans (the national average), or if you have an advanced degree, owing upwards of $57,000.

Debt like that can make it feel as if you’re putting the brakes on your entire financial future. “A lot of the worries I hear are, ‘I’ll never pay these off’ and ‘I’ll never be able to have a house or children,’” Bross says.

So, it should come as no surprise that many of us feel a twinge of regret when it comes to higher education — 47% of recent grads say they might not have gone to college if they’d known about the impact student loans would have on other areas of their lives.

Related: Student Loans Dashed My Dreams of Buying a Home

How To Give Yourself A Confidence Boost
There’s no sugar-coating the fact that it may take years, even decades, to pay off your loans. But, unlike credit card debt, you can view this debt as an investment — which can make the burden easier to bear.

"It would be a good exercise to list all of the positives that the student loans made possible,” Bross says. “Hopefully [they include things like] a better job, or a career path, rather than just a job-to-job future. Or, the ability to do analytical thinking.”

Still not convinced? Here’s some more earnings-power proof: A college graduate earns over $500,000 more than someone with just a high-school diploma over a lifetime of working, according to a study from the Brookings Institution.

The researchers also calculated that the average annual return-on-investment for a professional or bachelor’s degree was more than 15% — that’s far higher than the historical returns of stocks, bonds, gold, and housing investments.

Related: How to Tell if You’re Getting the Best Bang for Your College Buck 

So, think about those numbers the next time you feel overwhelmed after getting your monthly student loan statement. Bross sums it up this way: “Look not at the debt — but at what that debt has purchased for you.” 
Illustrated By Mallory Heyer.
Financial Insecurity #4: Feeling Stressed About Retirement

How It Saps Your Confidence
On the surface, our anxieties around retirement revolve around whether we’ll actually have enough money to retire at all. And, the majority of us don’t think we will: 59% of Americans are worried they won’t have enough saved for retirement, and 48% don’t think they will be able to maintain their standard of living in their golden years.

That, in turn, can make saving for retirement feel futile. “You think, ‘I can’t possibly save as much as they say [I need], so why start?’” Bross says.

Women can feel especially stressed because they have to plan for typically longer lifespans, prompting fears of “bag-lady syndrome.” In fact, one study found that 49% of women end up worrying about becoming broke and homeless in their later years.

“What retirement starts doing is bringing us closer to [the reality that we’re] aging — to a time when we will be dependent [on others] again,” Barr says.

Related: The Other Big Gender Gap? 

How To Give Yourself A Confidence Boost 
For starters, rethink how you view retirement. The stress you feel about not having enough money is likely rooted in the traditional notion that we have a cutoff point to our working lives.

“Retirement is a changing horizon,” Bross says. “It isn’t about putting money aside because you won’t be working for 30 years. Rather, it’s a retooling of what you’re doing, and how often.” In other words, think of retirement as a second act, where you have the freedom and time to pursue other opportunities — some of them paying.

So, write down all of the hobbies and interests you’ve had limited time to pursue, and think about how you can parlay them into a paying gig. Maybe you’re an amateur musician who can start giving music lessons. Or, perhaps you’re known for your cakes, and you can start selling them made-to-order for special occasions.

“The quality of your retirement will improve if you’re being paid for something you enjoy doing,” Bross says. “Be creative about how you approach the transition. It may not look like a chair on the beach, but you can have a great life, anyway.”

And, if you’re still feeling unsure about your nest-egg balance, focus first on the small moves you can make now to get there, rather than the daunting figure you’re hoping to reach.

“Decide to put a percentage or two into your 401(k) this year, and then up it every six months,” Bross suggests. “Surprisingly, you won’t notice the small changes.”

Next: 6 Tips for Having the Estate Planning Talk

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