Across every income group, people who lack financial confidence experience mostly negative emotions about money

In 2018, Ricky Gervais hosted Jerry Seinfeld and Ron Bennington on his Sirius XM show. At one point, Gervais said to Seinfeld, “You are the most confident comedian – before, during, and after your career – that I’ve ever met.”

Seinfeld then shared a recent exchange he had with fellow comedian Eddie Murphy. He told Murphy, “I was always obsessed with your confidence. I couldn’t figure out how you could be that confident.” And Murphy replied, “I was obsessed with your confidence. I couldn’t figure out how you were so confident.”

But Seinfeld admitted to him, “I’ve never felt that confident. It’s just a performance.” And Murphy said, “Me too. I don’t feel that confident, either. I feel very nervous before I go on stage.”

Hearing this anecdote, Bennington noted, “When [Eddie Murphy] was a kid, only about 19, he walked on to The Tonight Show like he owned it. The difference between you and him is that [Jerry] had much better material. [Eddie] was all personality.”

Ricky Gervais then shared his own experience with confidence. He said, “Thinking back, it wasn’t a case of confidence [for me]. It was that I didn’t care whether they liked me or not. I didn’t care. I didn’t care whether they laughed, or gasped, or walked out.”

Welcome back to Financially Well, the finance podcast for Millennials.

The Role of Confidence in Financial Decision-Making

You may assume, like I did, that confidence plays a critical role for comedians. After all, comedians must regularly stand alone on stage in front of thousands of people. And then they must also make those people laugh from funny, insightful commentary and stories.

Clearly, this is a very different situation than making financial decisions, right?

What Factors Determine Our Financial Wellbeing?

In 2021, Morningstar behavioral economist Sarah Newcomb wanted to better understand financial wellbeing. From her previous work, she knew that “the financially healthy enjoy the emotional security that comes from knowing they have enough to weather life’s storms, to rebound, and, if necessary, to rebuild. On top of basic security and resilience, the financially healthy experience a sense of satisfaction and contentment in their financial lives.”

But what characteristics and circumstances most often lead to strong financial health?

You might assume that your level of wealth ultimately determines how you think and feel about money. And, indeed, Newcomb’s study on Americans’ “emotional experiences with money” revealed that those with higher incomes have significantly more positive financial emotions.

But that wasn’t the most interesting finding in Newcomb’s study. In fact, a different response actually came closest to answering her research question.

Newcomb also asked her survey participants about their beliefs and attitudes toward money. Here’s how she describes what she learned:

“In every income group, people who believed they could handle financial difficulty also reported experiencing mostly positive emotions with respect to their money. And in every income group, those who did not believe they could handle difficulty experienced mostly negative emotions. In other words, confidence appears to be more important to financial wellbeing than income.”

She added, “When it comes to the emotional side of financial health, income matters. But the beliefs we hold about money and our own ability to manage it matter more. A person can have a high income, but if their financial mindset is weak, they may still have a very low quality of life with respect to their money.”

2 Tips for Boosting Your Financial Confidence

Comedians face immediate, public judgment during a show. By comparison, the personal financial decisions that we make in private look like closely-guarded state secrets.

The dynamics may be very different. But we can boost our financial confidence by borrowing from the approaches that Jerry Seinfeld, Eddie Murphy, and Ricky Gervais adopted early in their comedy careers.

Financial Confidence Tip #1: Fake It

Seinfeld and Murphy both confessed to faking confidence on stage, even after they became popular. Yet, ultimately, they still took the stage. 

Almost every Millennial feels uncertain about some aspect of their money. For most of us, at least one type of financial decision makes us stressed, confused, or pessimistic. But like comedians, we still should take action. We need to believe that we have sufficient knowledge and life experience – even if it’s imperfect – to make good enough financial decisions.

And this logic applies no matter how much wealth or financial education you have. From Ron Bennington’s perspective, Jerry Seinfeld initially had better material than Eddie Murphy. If Murphy heard that criticism, though, he didn’t flinch. He still walked on to The Tonight Show stage as if he was the funniest comedian in the country. 

And we can act similarly with our money. In my experience, more Millennials end up with financial regrets from failing to act, not from making mistakes. Despite our doubts, we know better than anyone how we want to use our money to improve our lives. And we have enough knowledge (or, at least, access to knowledge) to make those desired outcomes a reality. But we need to be willing to act.

---

“When it comes to the emotional side of financial health, income matters. But the beliefs we hold about money and our own ability to manage it matter more.”

Sarah Newcomb

---

Financial Confidence Tip #2: Stop Caring

Ricky Gervais, meanwhile, relied on an entirely different mindset. He didn’t even dwell on possible performance outcomes. Ultimately, the audience’s opinion just didn’t matter that much to him. He wrote and performed jokes for himself, driven by his own personal motivations.

Yet, unlike Gervais, we regularly allow peer comparisons and peer approval to influence our own financial confidence.

Since few people in the U.S. talk openly about money, we make assumptions. And we typically form these assumptions based on what we can see. We can’t see low savings account balances or credit card debt. But we can see the vacations that our friends take and the cars that they buy.

When we haven’t obtained these same things, we may question our own financial success or intelligence. We may even begin to make financial decisions that don’t align with our values and interests. But Gervais’s perspective reiterates that we’re most likely to achieve our own definition of financial success when we ignore others’ opinions.

Learning from Others to Improve Our Financial Wellbeing

You may be sitting here thinking, “I’ve never felt that confident in my financial decisions.” But if you can take a cue from Jerry Seinfeld, Eddie Murphy, and Ricky Gervais, you’re likely to leave your peers wondering, “I can’t figure out how you’re so confident with your money.”

Thanks for listening to the Financially Well podcast.

[Editor’s note: this article reflects the transcript (which I’ve edited for clarity) of a recent Financially Well podcast episode.]

---

About the author: Kevin Mahoney, CFP®

Hi, I’m Kevin. I’m a financial advisor in Washington, DC. I’m also the founder of Illumint, an independent financial planning company in the District that specializes in financial planning for Millennials like you. I empower our generation with the confidence to invest an inheritance, financial gift, or extra savings. If you’re new to Financially Well, welcome – you now have access to the leading finance podcast for Millennials. I encourage you to read, watch, or listen to the ideas I’ve shared about making your money work for you. And then when you’re ready, please send me your thoughts & questions!