The beginner’s guide to gaining financial confidence starts with taking responsibility for your finances.
The year was 2012, and I had just birthed by third baby. The days leading up to her birth had been stressful–to say the least. I had never gone past my due date with my first two children, yet baby number three made her debut 12 days late!
The wait was worth it. After a 3 1/2-hour labor from start to finish, Baby Girl was born. It was my easiest birth ever. I felt like I had conquered the world. “I could do that ten times!” I said, even before she was in my arms.
It was one of the only times in my life I’ve felt like I could embody the phrase: “I am woman; hear me roar!”
The confidence I felt after birthing my third baby stuck with me for a long time (and helped me through a much more difficult labor with my 4th baby–who is now 9 weeks old).
Don’t get me wrong: It took work to get there. I had read and studied for childbirth as if it were a final exam in one of my college classes.
But all of the effort I put into it was worth it.
What is it that you feel confident in? Keeping your home? Motherhood? Saving money?
Or maybe you don’t feel very confident in any of those things.
I think very few of us are born confident. (Although some people fake it pretty well!)
But the good news is that we can better ourselves in every area–on step at a time.
For years, our family lived on a low income, and financial confidence was something so elusive that I thought it wasn’t possible.
I’d look at our bare pantry at the end of each month and dream for the day I didn’t have to worry about whether or not we would have enough food to get us through until pay day.
I’d dread phone calls from the mortgage company because I knew we didn’t have both the money to pay rent where we were currently living and the mortgage on our home that wouldn’t sell in another state. (And we did end up losing that home.)
I never saw a day when we could save or give more–because we barely had enough to even make ends meet.
Over the past eight years, though, our family has learned how to go from barely surviving to more than just making it. These are my very best tips for gaining financial confidence.
They won’t happen overnight. Indeed, some of these steps will take years. But I guarantee you they will be worth it!!
5 Tips to Gaining Financial Confidence
1. Pay off debts as fast as possible.
Will and I started out our marriage with one small loan–for my engagement ring. Even though we were able to pay off the bill for my ring within a year, I can still remember how stressful it felt to have that debt hanging over us.
The day we made our last payment felt so freeing!
Whether you’ve accumulated several small loans from big purchasers or are looking at a 6-figure student loan payment, the faster you pay them off, the quicker you will gain financial confidence.
I know far too many families who are crippled in debt. My best advice is to live on the least amount possible while you are paying off this debt. Put as much toward the debt as you can, and when you pay it off, you will feel free!
2. Create more income.
In my upcoming book, More Than Just Making It: Hope for the Heart of the Financially Frustrated, I dive into two main money challenges: income problems and spending problems.
If you don’t have a spending problem but are still struggling with financial frustration, it’s likely that you have an income problem.
What’s the best way to solve an income problem? Create more money!
Starting this blog was a way for me to create more income for my family, and it’s now become our primary income source.
What might it be for you? Do you enjoy babysitting, sewing, crafting, baking? You can turn any hobby into a business with a little time and creativity.
Creating more income for your family will give you the breathing room you need to begin cultivating financial confidence.
3. Live on less than you make.
This is one of my favorite tips. Even if you live on a comfortable salary, living on less than you make will arm you with the financial confidence that you will be financially secure in the event of an emergency.
Financial planning guru Dave Ramsey recommends that everyone save at least three to six months of living expenses in the event of a job loss or other family crisis. Living on less than you make will lend breathing room to your savings account.
4. Live by a budget.
Once you have determined how much you will live on (because you don’t have to live on everything you make if you are earning a middle to high income!), set a budget and stick to it. Some people think budgets are confining, but I feel they are freeing. When I know I have money in my budget to spend, I can spend it! When I don’t have the money, it keeps me from overspending and accumulating debt–which will ultimately rob me of financial confidence down the road.
5. Give freely.
While it’s so easy to want to hoard our money away, I’ve seen huge freedom in giving freely. The more financially confidence we gain, the more we can confidently give to others–while realizing our needs will never be unmet either.
When you feel confident about your money, you can save for your goals and spend knowingly on what matters most to you.