Having your finances in order can be one of the biggest factors affecting self-confidence, according to research from UK-based Vanquis Bank – even outweighing romantic relationships and physical appearance.
Many people’s financial confidence may have already been dented by having to dip into their savings recently. Close to a quarter (24 per cent) of Vanquis customers admit they have already dipped into their lockdown savings.
Looking to boost your money confidence? Here are some simple tips.
Read: Eight ways to get the most out of your money
Establish your why
Before you start taking action, take some time to figure out why you want to improve your money confidence. Is it so you can build a rainy day fund? Or so you are ready to take the leap and start investing?
You need a reason that’s going to sustain and fuel you after the initial excitement wears off.
Having a clear vision of what you want and why you want it will give you the confidence to make those hard but necessary money decisions.
Knowledge is power
Many people were able to cut their spending in lockdown, but more spending opportunities now the world is opening up again could allow positive money habits to fly out of the window.
Simple things such as checking your balance regularly, and staying on top of what you owe, can help people feel financially empowered.
Many people avoid looking at the total balance of their outstanding debt, but this makes them feel more insecure and unsure of themselves. When you know what you’re dealing with, you can address the situation head-on and develop a realistic timeline and payment schedule.
Set clear financial goals
Many people struggle with their confidence around money because they don’t have any clearly defined goals. ‘Get out of debt’ or ‘start saving’ are very vague goals, and you’re going to have a hard time making any progress.
So take some time to set some really specific financial goals and how you’re going to achieve them.
Read: Five financial apps to get your money working for you
Find affordable ways to socialise
Diaries will soon start filling up, but you don’t need to break the bank when meeting family and friends. Over half (51 per cent) of Vanquis customers say they have found cost-effective ways to see their loved ones.
This could include making the most of the warm weather with a picnic in the park, searching the internet for buy one get one free ticket offers, or visiting a free museum or gallery.
Balance what you need and want
Every month, you will have non-negotiable expenses that you need to pay. This may include rent, groceries or transport costs. You will also have things you want to spend your money on, such as clothes or events.
Maintain a good relationship with money by consistently prioritising what you need over what you want. Then, when you do decide to splash out, you can treat yourself guilt-free.
Use credit wisely
Credit can be used for good. For many of us though, credit is about instant gratification or, maybe, amassing reward points. Knowing the terms and conditions of your credit – when it’s due to be repaid, how much must you repay to avoid interest repayments or reduce the principal and interest repayments, etc, is important. It’s financial knowledge that can put you in control.
Read: Six reasons retirees still need good credit
Research special offers
Everyone loves a bargain, but sometimes ‘special offers’ aren’t that special at all. Take Black Friday, for instance. For multiple years, Which? research has revealed that products sold at ‘special’ Black Friday prices often end up selling at the same price or cheaper later in the year.
Some had even seen the same reduction in the months before November. It’s not just big-ticket items that suffer from this. Supermarkets often reduce the same grocery items several times a year, meaning a discount one day could come around again soon. All this means you should think carefully before you pounce on a price drop.
Finally, keep going
Consistency is key when it comes to improving or maintaining good finances. Sharing your financial goals with family and friends could also help you to hold yourself accountable.
Do you feel confident when it comes to your finances? Do you use any of these tips? Share your thoughts in the comments section below.
– With PA
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