Lack Of Self-Esteem Has An Impact On Money Management

Understanding the lack of confidence

For as long as I can remember, I’ve always been an introvert and found it very hard to assert myself 🤐. This can come from a variety of causes, such as upbringing, social comparison, or even perfectionism.

There’s some of that for me, but I think that what impacted my self-esteem most was the fat phobia I experienced when I was very young. Indeed, as psychiatrist David Burns explains, negative childhood experiences undermine our confidence and self-worth. So it’s hardly surprising that as an adult, I’m still self-deprecating 🤕!

However, how can a lack of confidence impact our financial management? To fully understand, I’ve done some research to find the concrete issues and the link between the two 👀.

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The impact of self-confidence on our financial management

Firstly, when we lack self-confidence, we’re paralyzed by indecision, as financial psychologist Brad Klontz has shown. I can never make a decision because I’m always afraid of making the wrong one. So when it comes to a subject as delicate as money, my brain goes haywire easily 🤯!

Of course, all this has an impact on the way we perceive financial risks: opening an ownership saving scheme is out of the question, even if it could be very interesting for my future. Psychologist Daniel Crosby explains that people who are confident will find it easier to invest in things that offer financial rewards.

I’m willing to bet that those who have invested in Bitcoin and other cryptocurrencies don’t have a problem with self-esteem 😅. Or maybe they invested by mistake or when we had no idea it could pay off big.

Less confidence, less money

If risk-taking is reduced, our lack of confidence is also problematic, especially when it comes to negotiating 💰. Financial expert Rami Sethi explains that the more we believe in ourselves, the better we are at negotiating. We’re aware of our value and what we’re worth (and want!). It reminds me of all the times I’ve had my bank adviser trying to sell me financial products. I was interested in some of them, but I preferred to decline, for fear of being taken in and not knowing how to discuss rates 😓.

Yes, there are many fears when you don’t believe in yourself. We’re in a constant state of insecurity, which prevents us from planning our financial future. For a long time, my fear of numbers made me bury my head in the sand when it came to my accounts. If I didn’t go and see what was going on there, it was because everything was fine (spoiler alert: that’s not true 🙃). Of course, it’s a defense mechanism, I was in a state of avoidance so as not to panic. Except that, well, it’s hard to organize your spending and save for the future with that kind of behavior...

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Knowledge that reassures

We can find ourselves in a huge financial quagmire due to our lack of confidence. For a long time, I relied on my parents or people I considered adults (even though I’m an adult myself!) to help me manage my finances.

Except that, I’ve made myself less independent and more at the mercy of other people’s opinions. Clearly, I was infantilized for a long time because I didn’t know how to manage my money 😫. And that’s normal, it’s hard to take someone seriously when they’re asking to be mothered and accompanied.

That’s why I made a resolution a while back: it’s to stand on my own two feet and learn to have confidence in myself 💪. Of course, it doesn’t happen just like that, but I’ve made some small decisions to make progress. For example, I called my advisor to ask her some questions. As a result, I was able to open a savings account with a better rate than the one I had 🥳.

I’ve also learned savings methods, such as cash stuffing, to learn how to manage my money better. I think that’s one of the keys; you need to get rid of your fears because that’s what learning is all about. The more informed you are, the more confident you are! Gradually, you can take a series of small steps to get a better grip on your money!

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