Confidence can only come with knowledge and skills to put that knowledge to good use. When you are financially confident you can afford to live worry free. A confident spender knows how to make the choice between thing A and thing B. Similarly, a confident investor has a fair idea about risk and return that could arise from a particular investment. So in order to be successful in managing finances, you need to be confident with your abilities.
I recently partnered with Capital One as part of its effort to reimagine the banking experience and their goal of empowering people to feel more confident with their relationship with money.
The Banking Reimagined tour stopped in Miami last month to mark and celebrate the opening of six new Capital One Cafés in South Florida and to give people a taste of fun ways you can gain more financial confidence.
The state-of-the-art 54-foot trailer housing a smart, personal digital experience that recognizes participants at every stage, all of which was designed to be a 20-minute interactive experience where you help identify your goals, values, and beliefs and whether they align with how you live your life and spend money.
If you’ve never seen or heard of a Capital One Café, it’s a hybrid space where individuals can recharge their bank accounts, devices and lives while learning new ways to manage their finances, try out new digital and financial tools, or simply grab a great cup of coffee.
The Banking Reimagined Tour and the upcoming Capital One Cafés got me thinking about my own financial confidence and how I got where I am today.
First of all, my financial confidence took its own time to build up. When I was still in school, my father lost his job to automation drive in the steel industry.
We faced financial hardship for few years but we survived the hardship and my family is happy again. The lessons I learned from that incident made me stronger, wiser and more confident today.
I treat my personal finances as a business, where only profit counts (saving is the profit in this case). Here are a few of the steps I took to become confident.
Increasing my income
First and foremost, I needed a stable job, then I needed to increase my earnings. I needed to excel at the job and wanted to be an indispensable resource. I made it a point to become one of the best employees, one difficult to replace. This ensures a steady income for as long as I want.
This was easier said than done. I work in the IT industry, technology constantly changes here. So I need to stay on top of the latest technologies, processes, and methodologies. That means I spend a considerable time upgrading my skills.
Maximize your time
I used the time I had after work and on weekends to open additional income streams. I needed to find a job that wouldn’t keep me away from my family. A job that I could do from home.
I admit this is overwhelming for many, a job where there’s no 9-5 routine with an expectation to be available 24 X 7, and that requires you to be constantly trained and up-skilled is in itself challenging. Add to it, a pressure to create side income by using whatever time I could get.
Fortunately, finance is my favorite subject, so much so that I live and breathe in finance. Naturally, I became a personal finance blogger.
A blog is a property, a web property that has value. If your web property attracts visitors, it attracts advertisers, and that results in a side income. The beauty is, you don’t have to work continuously to earn income from blogging. One affiliate post you write can earn you income for years to come.
Saving most of the income
This is often neglected, yet, relatively easier part of personal finance. It becomes tough for many, due to lack of formal education in this field. Managing money is not taught in schools, personal finance is never in any curriculum.
Yet, it’s so important.
You can only “earn profit”when your total expense is less than your total income.
When your expenses become more than income, you need to borrow money to cover the excess. The borrowed money comes at a cost, in the form of interest. This interest cuts into your future income.
When you borrow too much money you get caught in a debt net.
My mantra was to not be in debt, ever.
I am glad I was never in debt. Being born and brought up in a developing nation where you don’t see excess, saving money was easier for me. In India saving is the way of life. Living below the means was the order of the day, during my childhood.
I consistently saved around 30-50% of my monthly income. And, having done so consistently, increased my profit.
What you can do to increase your financial confidence
Conviction, discipline and planning are the biggest factors that helped me become financially comfortable and confident. When you commit to a budget or a plan and achieve your financial goals, small or large, the confidence you gain is just like when you accomplish anything else in life.
The trick is taking that first step to tackle your financial goals and create a realistic roadmap to get you there. This is why I was inspired to write about financial confidence after seeing and hearing about what Capital One is doing to empower people.
They are trying to help people take that first step to tackling what many likely see as overwhelming – their finances. From the Banking Reimagined Tour to the Capital One Cafés with financial education tools, Capital One seems committed to helping people (and for free!).
If you’re not sure what your first step is, I recommend visiting the Capital One Café website and see if there is one near you. If there is, stop by to see if they have the digital tools and financial guidance you’re looking for.
For example, Money Coaching, a free three-session program for anyone even non-customers, is offered in many Capital One Cafés and is a great tool to take that first step.
It’s not financial advice, it’s more like life coaching to help you identify your values, beliefs and goals, and determine if the way you’re living your life is consistent with them.
You don’t give the Money Coach any financial information, it’s about how you live your life and what matters most to you.
The first step is the hardest step in tackling your finances, but all you need is a little confidence to get you there.