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Three ways confidence makes you better with money

Confidence helps you in almost every area of life. Finances is no exception.

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When it comes to managing your money, there's a piece of the puzzle that some don't consider: If you're determined to improve your personal finances, you can start byboosting your level of confidence. You might be thinking one has nothing to do with the other, but low confidence can stand in the way of financial success.

Here's how boosting your confidence can also boost your pocketbook.

1. You're Not Afraid to Ask for What You Want

About 10 years ago, I had a friend who had recently graduated college and found his first "real job." He became frustrated with the pay after only six months and felt he deserved more because he finished college with a high GPA and had prior experience through internships. He told me that he was going to walk into his employer's office on Monday morning and ask for a $15,000 a year raise — "negotiable, of course" (which got the side-eye from me) — but wouldn't take anything less than $10,000.

We looked at him like he was crazy. He was only 24 years old and fresh out of college. We told the dummy to slow his roll — because that's what friends do. Let me rephrase that — that's what negative, house-poor friends do.

He didn't listen to us, and that's a good thing, because he got exactly what he wanted — a higher salary and a better position. I don't remember what he said to his boss, but I learned a valuable lesson that day: Don't be afraid to go after what you want, and don't listen to naysayers. If he had listened to us, who knows how long it would've taken him to move up in the company.

The point: Lack of confidence can cause you to doubt your abilities. And when there's doubt, you might miss opportunities that can result in a higher salary. A confident person, on the other hand, believes in himself. He's not afraid to ask for what he wants and deserves. From a financial standpoint, confidence gives you the strength to negotiate your salary and get paid your worth.

Just imagine what you could do with an increase in income. You could stop living paycheck-to-paycheck, open a retirement account, or finally put a dent in your credit card debt. And you'd also pick up the tab for your idiot, low-paid friends the next time you go out. That goes without saying, of course.

2. You'll Appear More Competent to Employers

Even if you don't ask your employer for more money, she might notice your confidence and feel you're the right fit for a challenging position when she's ready to offer promotions.

Employers don't only look for people who have a particular skill set or level of experience. They also assess an employee's boldness, poise, and assertiveness. Being confident can get you to the top faster than someone who's unsure or second-guesses himself. This is especially true for women, who tend to demonstrate less confidence in the workplace, suggest Katty Kay and Claire Shipman, authors of The Confidence Code.

If your employer thinks you lack confidence, he might unfairly conclude that you're not ready for certain responsibilities. And when you're constantly passed over for promotions, you might stay stuck at the same pay grade living paycheck-to-paycheck for much longer than you'd like.

3. You Don't Have Anything to Prove

It's sad, but some people will risk serious debt just to prove they can maintain the same lifestyle as their friends. I understand not wanting to be left behind when your friends eat at nice restaurants or take exotic vacations together. But under no circumstances should you get into major debt or end up flat broke from supporting a lifestyle you can't afford.

It all goes back to confidence. A confident person isn't going to sacrifice their financial wellbeing so they can rub elbows or kick it with the Joneses. They don't get in over their heads financing expensive cars or houses, and they certainly don't rack up credit card debt to give the appearance that they're doing better than they actually are.

Confident people know that financial success isn't about material possessions, but rather how well they manage their money. Someone can earn a lot and be broke, whereas someone who earns far less can have a bigger bank account. When you're a confident person and have absolutely nothing to prove, you're more apt to keep your personal expenses low and enjoy more disposable income. Thus it becomes easier to save a three to six-month cash cushion, and you're able to reach other financial goals, such as paying off credit card debt, saving for a kid's education, or making home improvements that can boost your property value.

Life is better — and cheaper — when you're not trying to be someone you're not.

This article is from Mikey Rox of Wise Bread, an award-winning personal finance and credit card comparison website.

The Christian Science Monitor has assembled a diverse group of the best personal finance bloggers out there. Our guest bloggers are not employed or directed by the Monitor and the views expressed are the bloggers' own, as is responsibility for the content of their blogs. To contact us about a blogger, click here. To add or view a comment on a guest blog, please go to the blogger's own site by clicking on the link in the blog description box above.

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