As an adult, you probably carry with you memories of how your family dealt with their finances. Or perhaps not – many families still don’t talk about money matters. Many people also had limited financial education at school or difficult experiences with money in later life. All of these things can lead to lower confidence with money. But it’s not too late to build a more positive approach. With more confidence, you can take decisive, well-informed actions to get closer to your goals.
Table of contents
What are the components of money confidence?
Maji’s four pillars of financial wellbeing all have a part to play in building money confidence.
- The most essential is money mindset. Being aware of your feelings around money and where these come from can help you adjust your mindset and increase your confidence.
- Money management, i.e. your spending, saving and borrowing habits, can feel overwhelming at times. Building your confidence with money can help the everyday become smoother, which in turn can help you feel even more positive.
- Financial resilience means being able to deal with shocks (like unexpected bills or time without pay). Having a financial cushion or the right insurance in place can help you feel more secure.
- Future planning means thinking about your long-term financial health, including retirement. With 53% of people worried about not saving enough into their pension, having a plan in place can help reduce your stress.
Maji’s coaching resources will help you improve these four pillars, step-by-step, but we’ve also got some top tips for you to get started right away!
Improving your money mindset
Our past experiences contribute to the tapestry of our money mindset, and understanding where our money views come from can help us address any problem areas. For example, you might feel nervous about using a credit card if debt was a problem for you or your family in the past. But understanding how to build your credit score and borrow responsibly could help you adapt your mindset and meet your goals.
Working with a financial coach can help you break down where your money mindset might come from, and look at ways to move forwards with a more positive outlook.
Confident money management
One thing you could do today to feel more confident about money management is to get oversight of your spending. Maji’s platform lets you do this quickly and easily by securely linking your bank account to the app, which then gives you a breakdown of your transactions. You can categorise these to get more information about what you’re spending the most money on. Having a more detailed understanding of what’s actually going out of your account can give you the confidence to take control of your spending habits.
Facing emergencies with resilience
Fear of the unexpected can drag down your confidence. When it comes to finances – being prepared for a ‘rainy day’, be that illness, time out of work, or a bill you hadn’t planned for – worrying about how you’d survive can leave you in a state of anxiety. So building your emergency fund, a pot to cover 3-6 months’ worth of living expenses, can help you feel more positive, even if difficulties arise. Calculating how much you need to save could be your first step.
Heading for a bright future
Many people lack confidence when it comes to their pension. Between the confusing jargon and different rules for saving into and taking out a pension, it’s understandable. Taking a little time to educate yourself about your pension can be the first step towards taking empowered action.
Important takeaways
- Remember that you don’t need to solve every single financial issue at the same time. Start with small steps to understand and manage your money better.
- Knowledge is power. Take advantage of Maji’s tools to get visibility over what’s going on with your money, and understand how to make changes.
- Coaching can be a powerful way to address the foundations of your money mindset and increase your confidence.
- A confident, positive mindset can help you take actions towards your goals, which can in turn make you feel better.
