Episode Transcript:
Teresa Mitchell, CFP: Values and money don't mix, or do they? Join me, financial coach, Teresa Mitchell to find out. Let's explore how women can make money while making a difference. This is Lady Money!
Welcome! Please join me for Lady Money Tips in Ten.
Confidence is what turns thoughts into action. Unfortunately, we women sometimes lack it – especially around money.
The point of Tips in Ten is to take a deeper dive into some of the things we discussed during the Lady Money interview podcasts. And then to give you a few nuggets you can use to improve your own life. Let's get started!
Why is there a confidence gap?
There are wide ranging theories. Women are perfectionists and risk adverse – to... it isn’t that women lack confidence – men simply have too much of it! Regardless of the reason there is a documented confidence gap between men and women regarding money.
However, there is good news. While your level of self-confidence is partly genetic according to the book The Confidence Code, you can put in the work and learn to be more confident. But first you need to have a better understanding of the concept of self.
What determines our sense of self?
The image we have of ourselves is called self-concept in psychological terms. Basically, it is a collection of beliefs we hold about our behavior, abilities and unique characteristics. One psychologist divided the concept of self into 3 parts – your ideal self, your self-image and your self-esteem. If how you wish you were (your ideal “somewhere in the future” self) and how you actually see yourself now (your current self-image) aren’t aligned, it can negatively affect your self-esteem.
Are the cards stacked against ever becoming our ideal confident self?
If you ask someone, “Have you changed from the person you were 10 years ago?” they will say “Yes!”. But if you ask about the future most people don’t see a change. Harvard psychologist, Daniel Gilbert puts it simply: “Human beings are works in progress that mistakenly think they’re finished.” Unfortunately, when we don’t see alternatives to our current self-image -- it can create a negative state of mind. In psychology it is called a “negative bias”. In plain English it translates into -- if you don’t see it, you can’t be it.
“Research has shown that shaping your future self requires deliberate practice.” In the new field of Positive Psychology, the assumption is that people are driven by their pasts but also influenced by their views of the future. Or as Dr. Gilbert put it, the first step is imagining your future self. “Your future self is not someone you discover, but someone you decide to be.”
What if we flipped the script and focused on what could go “right”?
We usually think of psychology in relationship to negative disorders or other mental issues. But happiness researchers are focusing on the factors that make people feel better using new assumptions from the field of Positive Psychology. To put it simply, wouldn’t we be better off if we thought about what could go right in the future rather than what could go wrong?
Based on this premise -- a “Best Possible Self” exercise -- where you imagine your best possible future self can lead to “feelings of optimism”. This is according to a recent prominent German study. While there is no evidence that the affect is permanent -- it does seem to be an effective tool for turning around negative thoughts. And it helps you overcome obstacles that are preventing you from achieving your goals.
But what is a Best Possible Self exercise?
Good question! In Positive Psychology they call it an “intervention” rather than an exercise. Interventions are intentional activities intended to cultivate positive feelings, thoughts and behaviors.
Similar “interventions” have been called by other names -- such as the Future Authoring exercise mentioned in the Lady Money podcast episode on Financial Wellbeing. Tara Mohr refers to it as an Inner Mentor Visualization in her book Playing Big.
The format can vary. Some versions use a guided visualization, others suggest journaling over several days or even drawing a picture of the ideal future you envision. Regardless, the goal is the same. The exercise is intended to lead to action by improving your mood and your outlook on the future.
These are the instructions for the journaling version that was part of that significant German research study:
- Visualize your best possible future self 1 to 10 years from now. It should be very optimistic but not totally unrealistic. Explore the details of your new situation including how you feel, where you would be and who you are with.
- Spend 10 minutes writing a description of your future self. Don’t overthink it – just write what comes to mind.
That’s all there is to it! Most people have a more optimistic attitude for up to a week. If you enjoy journaling – think about making this exercise a regular activity.
How does this relate to confidence and money?
There are good reasons for women’s lack of confidence around money. For one thing, most women have a full plate. So, they don’t always prioritize things like investing for retirement until late in the game (sometimes too late). And when they do save, they also feel risk deeply. This means money is more likely to languish in a savings account rather than grow in a diversified investment portfolio. Their focus is on the present. Prioritizing family, community and career means they fail to realize there are other serious risks. Besides stock market risk there is longevity risk (running out of money before life) and purchasing power risk (the devastating effects of inflation decades from now).
It helps if you can change your perspective. Surprisingly. confidence is not really about self-esteem or accomplishments. It is about the ability to take action. The point of exercises like the Best Possible Self -- is that they give you the assurance that you can have a positive outcome. Basic money and investing concepts can be learned like anything else. It is the belief in yourself that you can do something -- that gives you the motivation to actually do it.
TIPS OUTRO:
Thanks so much for listening! I hope you found Lady Money – Tips in Ten, helpful. If you have any questions, you would like me to address,or if you want more information on the Lady Money financial coaching program or blog, check out the show notes.
Until next time, this has been Lady Money – where money and values do mix.
Resources...
Confidence https://www.linkedin.com/pulse/20140515185848-316741766-the-genes-that-control-confidence-do-you-have-them/
What is Self-Concept? https://www.verywellmind.com/what-is-self-concept-2795865
Take Ownership of Your Future Self https://hbr.org/2020/08/take-ownership-of-your-future-self
Gilbert Ted Talk
https://www.ted.com/talks/dan_gilbert_the_psychology_of_your_future_self/transcript?language=en
Program your Happiness https://www.psychologytoday.com/us/blog/fulfillment-any-age/202002/is-it-possible-program-your-happiness
Future Self Exercise https://www.academiclifecoaching.com/coaching/parent-guide/future-self/
Guided Visualizations...
Inner Mentor Guided Visualization https://www.taramohr.com/book/inner-mentor-signup/
Best Self Videohttps://www.youtube.com/watch?v=G_jEsnDEIa0
The Change Trianglehttps://www.youtube.com/watch?v=chaOiy_EwH8
Future Self w/ Jennifer Gracehttps://www.youtube.com/watch?v=JB_UkMzf-9M
