Finances

"Money is only a tool. It will take you wherever you wish,
but it will not replace you as the driver."

~ Ayn Rand

Low self-confidence is one of the main impediments to financial success. It makes us doubt our abilities and judgment and prevents us from actualizing our potential. One reason confidence is so important is its impact on ambition and motivation. People with a positive attitude who believe in themselves have more ambitious goals, and they regularly act on those goals, leading to more opportunities and higher incomes.

Whether someone is highly-educated and working in a prestigious profession or as a blue-collar employee, confidence has been proven to be a determining factor for making a better income.

However, simply taking control of your financial habits can boost your confidence and improve your financial position. According to a survey by the Certified Financial Planner Board of Standards, Inc., Americans who have a financial plan of any sort feel more confident and are more optimistic about their futures, and they are more likely to save money and have fewer financial difficulties.

Whether or not you are earning a great income or enjoying the career success you aspire to, practicing smart financial habits will give you clarity, put your money to work for you, and place you in the driver's seat of your financial future. As you master your financial goals and habits, you'll feel more confident in all areas of your life.

Confidence will improve your financial situation—and good financial knowledge and planning with improve your confidence.

 Get organized.

Nothing makes you feel more out-of-control than disorganization. If your financial system involves bills and important documents scattered around the house or stuffed in drawers, it's hard to feel confident about yourself and your skills at money management. Having an organized financial system can save you time and reduce the stress of not being able to put your hands on something when you need it. To get organized, you need to create a workable system to track your financial information—everything from spending to retirement plans. A system will help you pay bills on time, track your expenses, and easily see how your investments are performing.

Action Steps:Begin by gathering all of the paperwork, bills, receipts, and documents you have scattered in various  places. Create stacks for each type of paperwork (bills, mortgage document, insurance, etc.), and arrange them by date. Organize these stacked piles into separate file folders or boxes, labeled with what they are. If you have some information or documents on your computer, write a list of all of these. Here is a good outline for setting up a basic filing system for all of the documents you've gathered. Consider reducing paper by setting up online bill pay and banking, and learn to use an online personal finance system like Quicken, so you can view all of your accounts in one place.

In a culture driven by consumerism, getting into debt can happen without much thought or effort. It's easy to convince ourselves we need the latest and greatest of everything, from iPhones to cars. Our bad spending habits are compounded by high interest rates, making it even harder to stay on top of debt. Having financial debt not only impacts your confidence and financial future, it also can make you sick. According to an Associated Press-AOL Health poll, the stress from being in debt can cause migraines, anxiety, ulcers, severe depression, and even heart attacks.

Action Steps: Paying off debt will require living below your means and perhaps finding other sources of income until the debt is paid. Start with your smallest debt first. It will be the easiest to pay off, and checking this debt off your list will give you a boost of confidence and motivation to tackle the rest. Read this article by finance expert Dave Ramsey on paying off debt