Transform Self-doubt into Confidence and Smash Your Financial Goals

The first step to achieving any goal is convincing yourself it's possible

Jan 29, 2024

Financial advice focuses too much on numbers and not enough on basic psychology.

Knowing the numbers behind financial goals like debt repayment, budgeting, and retirement planning might feel intimidating—but understanding these numbers is actually the easy part.

The hard part is taking a financial plan and executing it every day for years and even decades. Taking that kind of consistent action is more about psychology and has almost nothing to do with math.

If you want to achieve your financial goals, the very first thing you need to do is develop enough self-confidence to convince yourself that you can do it.

The Power of Self-Belief in Achieving Financial Goals

A 2019 paper titled “Using Our Understanding of Time to Increase Self-efficacy Towards Goal Achievement” highlights the power of “self-efficacy”—which is a fancier way to say self-belief—in helping us achieve goals.

The research highlights three ways self-belief drives our goal achievement:

More confident decision-making: People with higher levels of self-belief are more confident in their decisions. Self-confident people spend more time assessing their skills and focusing on past achievements rather than failures—this helps them be more confident in future decision-making.
Motivated to set goals: People with higher self-belief are more likely to set goals. They are less stressed when setting difficult goals and tend to set more goals as they have a stronger belief in their ability to achieve them.
Overcoming Setbacks: The research shows that people with higher self-confidence are less likely to view goals as unattainable and are more persistent in pursuing them. They are less likely to give up when faced with obstacles, unlike those with lower self-confidence, who might view goals as less attainable and be more inclined to abandon them.

If you believe you can achieve your financial goals, you’ll be more confident, motivated, and better equipped to handle the inevitable setbacks on your journey to accomplishing your goals.

The more ambitious the goal, the more important self-confidence becomes.

Want to build more self-confidence? Change your mind

Now, let’s review what the research says about how you might increase your self-belief in your ability to achieve your financial goals.

In the paper referenced above, the researchers introduce a concept called “Time Perspective,” which refers to how people perceive and relate to time in the context of their goals.

Here are some examples of common ways people perceive time:

Focusing on positive past experiences
Being heavily influenced by present circumstances
Having a future-oriented mindset.

The researchers investigated how these perspectives affect a person's self-confidence in achieving goals— and, crucially—the impact on actual goal achievement.

Here’s what they found:

A balanced perspective of time that combines positive reflections on the past and an optimistic view of the future can significantly increase self-belief and help people achieve their goals.

On the other hand, if someone is stuck in a mindset where they feel that no matter what they do, their current situation can’t change, they have little self-confidence and become much less likely to even set goals, let alone achieve them. They get stuck in a “It’s hopeless, so why bother?” mindset, where hopes and dreams die.

A writing exercise to help build a balanced perspective

If self-confidence is required to achieve goals and a balanced mindset can help instill self-confidence, the natural question is, “How can I shift to a balanced mindset?”

In one of the studies, participants were given various writing exercises focused on different aspects of time perspective, including reflecting positively on past experiences.

This intervention showed that actively recalling and writing about past successes and integrating these recollections with future planning Increased self-confidence and goal achievement.

This suggests that by deliberately focusing on positive past experiences and achievements, people can reframe their past in a more positive light, boosting their confidence and effectiveness in achieving future goals.

So, if you want to build your financial self-confidence and achieve ambitious financial goals, start by grabbing a pen and a piece of paper and start writing about times in the past when you’ve made good decisions with money.

It could be something big like negotiating a pay raise or something small like staying within your budget during the holidays.

Write down as many of these positive money memories as possible—really put in time and think about this—and pin that list of memories somewhere visible, like the fridge.

Pull that list off the fridge when you need it.

Setting a new goal? Review the list of positive memories.

Had a setback on your goals, or are you beginning to double yourself? Review the list of positive memories.

And don’t forget to keep adding to the list as you continue making good financial decisions.

Eventually, that list of positive financial memories will get so long that even the most pessimistic person will begin to believe in their ability to smash every single one of their financial goals.

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