Young couple saving coins

Get Financially Confident Starting Now

For a good deal of my life, I lived under a dark cloud of fear that I would end up financially destitute—a bag lady. Studies reveal that I’m not the only one. Most of us have felt that way, not because we’re broke, but because we lack confidence. That makes us timid, worried and financially insecure.

Look, we don’t have to accept financial insecurity as some kind of life sentence. And that constant and gnawing fear of becoming destitute? Forget it! We can do something about this.

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Become a saver. Saving money is like magic because it changes your attitude and calms your fears. 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. You must start now, today—no matter your situation. Even if you are in debt and struggling to catch up and even if you are already contributing to a 401(k) plan at work. This is different. You need money in the bank to boost your financial confidence. 

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.

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. Check out an online savings account at CapitalOne 360 (formerly ING Direct) or 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.

Set a financial goal. Decide on one specific financial goal you want to accomplish. For any plan to succeed, it needs to be specific, reasonable and measurable. Example: Let’s say you want to save $2,400—about $50 a week. That is specific and it may be reasonable provided you are super motivated to stretch and make adjustments in other areas. And it’s measurable because you can check your account balance regularly.

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? Continue feeling sorry for yourself? I have a better idea. Get mad! Decide once and for all that you will not sell your soul to a credit card—not one more day, not one more purchase. Get righteously indignant at the very idea of transferring your future wealth to a piece of plastic! Decide that you will do whatever it takes to get out of debt.

Determine to adopt these four behaviors into your life right now. One step at a time you will make progress and gain confidence. Single steps made consistently become miles.

Question: On a scale of 1 to 10, where 1=Not At All and 10=Very High, how do you rate your financial confidence?

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3 replies
  1. Sue in MN
    Sue in MN says:

    We’re retired and spend winters in an RV park in a warm place, with people from all walks of life and financial statuses. I continue to be amazed at how many people, even retirees, and even folks who made good salaries for years, live paycheck to paycheck and are always in debt. One of the big things we preach to people (and we have to repeat it way too often) is to plan ahead. Living on a fixed income, every month we put away 1/12th of repeating expenses – lot rent, taxes, insurance premiums… into dedicated savings accounts using auto-deposits set up online; we make a “car repair or replacement payment” into another account and put aside money for Christmas, charity and emergency expenses. If we want to take a trip, we save up at least some of the money in advance so we don’t draw too much out of our lifetime savings. When the bills are due, the money is there and we don’t have to put it on a credit card or scrimp for months to recover. Of course, we have less money in hand each month so we have to plan our purchases, activities and eating out more carefully, but we don’t feel deprived and there’s no worrying about paying bills when due. We also use the best “cash back” credit cards we could find and pay every possible expense with them – and pay off in full each month. In the past 2 years the “cash back” has covered replacement of a water heater, refrigerator & sofa.

    Reply
  2. Susan Wong
    Susan Wong says:

    Long ago we were deep in debt. We woke up and decided to get out. We cut cable, newspaper and going out to eat. We purchased nothing. Just groceries. The bare basics. Over a year later we were debt free. Now we live on two credit cards that we pay off at the end of the month. DEBT FREE.

    Reply
  3. Birgit Nicolaisen
    Birgit Nicolaisen says:

    Thanks to you, my financial confidence has gone from a 1 or 2 to 8 or 9. My parents taught me nothing about finances, so I got in a bad place. Wish I’d found you sooner, but we’re on the right path now. No extra credit card debt from Christmas this year and $ in the bank to pay for our driveway replacement this spring.

    Due to your teachings, we were able to use an inheritance for a long overdue trip to visit family in Germany last summer and to do a bunch of upgrades around the house. Because we didn’t have overwhelming debt to pay off, we could use it for some fun and some work on our “home owners’ to-do list”. Thank you!!

    Reply

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