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4 important steps you should take to boost your financial confidence, according to a Fintech VP

Finfit VP Charles Lattimer shared what people can do to increase their financial confidence.

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The last few years have had a huge impact on everyone's finances. The pandemic may have forced people into situations where they're spending less and have more money to put toward things like paying off debt — and some of these habits might have stuck around.

Despite this, data from Finfit, a financial wellness platform, suggests that some Americans have experienced a decrease in financial confidence. In 2021, only 19% of respondents reported feeling very confident in their ability to meet their long-term financial goals. This number is down from 26% in 2020.

"Financial uncertainty leads to increased stress, which has a host of negative consequences on health and performance at work," said Charles Lattimer, the Vice President of Growth and Innovation at Finfit.

Select asked Lattimer what people can do to increase their confidence when it comes to managing their money. Here's what he shared.

How to boost your financial confidence

According to Lattimer, there are four steps that are key to feeling more secure and confident when it comes to managing your money.

"First, you need to start working towards a goal. Next, you need to find out exactly what you have to do in order to reach those goals. Then, you must make sure you have all of the right tools easily accessible, and finally, you need to take action," he told Select.

Setting goals

Thinking about what you want to achieve can be both exciting and motivating, which is why setting specific goals can be an impactful way to promote growth in any area of life, not just your finances. At the same time, though, setting goals can feel daunting because we may be afraid of falling short and feeling like we've failed.

Don't just think of your goals as something you can either achieve or not achieve; instead, think of your financial goals as a vision that's informing a series of intentional, meaningful next steps. Even if you come up a little short on your goal, you'll still end up in a better position than you were in when you started if you've been putting in the work to take the right steps.

When setting goals, you should also try to avoid creating goals that are too extreme. It can be easy to feel like you need to achieve all your financial goals at the same time — maxing out your retirement contributions and paying off thousands of dollars in debt all at the same time. But setting goals that are likely beyond your current reach can actually be discouraging.

Instead, think about the goals that are more doable based on your current circumstances. Even if these goals feel really small at first — like, saving $50 per month, they'll still allow you to build healthy financial habits you'll be able to maintain long-term.

Figuring out how to achieve the goals you set

Once you create a financial goal, it's important to visualize what steps will help you make progress toward that goal. This is where a financial planner can come in.

While having an ongoing relationship with a financial professional may not be right for everyone, you can certainly benefit from at least having an initial consultation with one.

After taking a bird's eye view of your financial profile, a financial planner may be able to tell you what steps you should be prioritizing — and they can also discuss specific ways to help you work on those steps. And, they can also provide perspectives and options that haven't even crossed your mind yet.

Zoe Financial is a platform that can match you with a list of professionals who specialize in your concerns. Another option is to use PlannerSearch.org to find a professional in your state. It'll give you a list of CFP's near you, and you can also filter by specialties such as employee benefits, getting married, getting divorced, bankruptcy, home buying and more.

Gathering the right tools

Once you have your goal in mind and an idea of what you should do to achieve it, you may need to seek out some tools to help you along the way.

For example, if your goal is to get into the habit of knowing where your money is going or start following a budget, a budgeting app can be an instrumental tool for taking the next steps. Personal Capital, for example, connects to your bank accounts, credit cardsinvestment accounts and other financial accounts, and the platform automatically categorizes your transactions. This gives you a low-lift way to figure out where your money is going each month. And, you can use these insights to build a realistic budget.

Or let's say one thing you really want to accomplish this year is to start investing your money, even if you don't know what to invest in. Apps like Wealthfront and Betterment, which use robo-advisors to build a portfolio of investments that make sense for you based on your risk tolerance, goals and retirement date, can act as tools to help you get there.

Taking action

Once you have all these ideas on paper, it's time to actually take action. Thinking about what you have to do is only half the battle — actually doing it can feel scarier. But according to Lattimer, avoidance can actually undermine your progress.

Putting all these steps together can help you feel more in control of your finances. And the more positive steps you take, the more progress you'll make — and the more secure and motivated you'll feel to keep going.

Editorial Note: Opinions, analyses, reviews or recommendations expressed in this article are those of the Select editorial staff’s alone, and have not been reviewed, approved or otherwise endorsed by any third party.
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