Confidence is great for many a thing. Like when you’re working up the nerve to ask the cute person at the bar to dance, or when you’re about to give a speech to a room of your peers. But overconfidence is best avoided, especially when mixed with ignorance (I’m looking at you, Achilles, and your weak heel). Overconfidence when it comes to your finances? REALLY not good.
LearnVest, a financial planning service, conducted a survey with questions related to how a person’s confidence about their finances affects their saving/spending behavior. In answers from 100,000 users, they found a huge discrepancy in the level of financial confidence between the different age brackets.
There’s a story my fiancée likes to hold against me from when we were first dating. We went into a Blockbuster (which might date this story right off the bat) to pick out a movie. She badly needed to use the bathroom, but figured we’d be in and out of there in a second, and my apartment was right around the corner, so she didn’t say anything. I wandered into the “4 for $20” section, and started browsing for the next half hour. I found three movies I wanted, but for the fourth, I could only find movies I’d pay money to not have to see. Meanwhile, the woman I’d later decide to spend the rest of my life with was doing her best to be patient with my indecisiveness. She said, “Look, just get the three you want and throw away the fourth. It’s still a deal!” But I still kept hunting for a worthy fourth. Finding nothing, I eventually gave up, leaving empty-handed. My poor girlfriend’s bladder was put through that ordeal for nothing.