Setting Financial Goals

A graphic illustration of a notebook and a pencil

Setting financial goals isn't easy. If you live paycheck-to-paycheck, saving even a little money each month can be difficult. Then there is all the conflicting advice out there. What if matters were made even more complicated by “impostor syndrome”, a term coined by two American psychologists, Pauline Clance and Suzanne Imes, in 1978.

Simply put, it is the belief that what other people perceive of as accomplishments due to your skill, intellect, or other internal factors are in fact evidence that you are a fraud.

When those who have impostor syndrome receive compliments, rather than feeling pride at the praise, sufferers probably feel unease instead. “It was just dumb luck,” they're likely to think, or “What if I'm found out?” If you've experienced this feeling, it can prevent you from reaching financial goals like advancing your career or maxing out a savings account.

After all, if your every success intensifies the belief that you're somehow deceiving people and essentially faking it, it only makes sense that you'd avoid situations that make you feel that way. This can include not taking action to improve your life and finances. So how can impostor syndrome affect your financial life, and how you overcome it? Let's try to understand that.

Problem: Not negotiating during the hiring process

People who suffer from impostor syndrome may be less likely to advocate for themselves when negotiating salary or other benefits when they're offered a new job. Why is that? It's because they don't feel they deserve it.

Related >> How to negotiate when you hate negotiating

Such folks may feel lucky to be offered any job at all and, therefore, believe that whatever they're offered initially must be fair and market-appropriate. However, most employers leave some room in their budgets because they expect you to negotiate. And since any future merit or cost of living increases will be based on your starting salary, it is to your benefit to make that initial amount as commensurate as possible with your skill set and value to the company.

Solution: Quantify your contribution

Rather than couching your requests in terms of what you want or deserve, learn to quantify your skill set as much as possible. Being able to rattle off any certifications you possess as well as being able to assign a numeric value to contributions you've made in prior positions is more convincing to employers in the first place. Additionally, it can help you internalize the fact that your terms are reasonable and justified, which can give you the confidence to ask in the first place.

Obviously, having these things outlined in your resume is an important first step to getting an interview, but that doesn't mean your eventual offer will take all your accomplishments into account. And since everything doesn't fit on a resume, memorizing a master list of your deeds can lead potential employers to realize that there's even more to you than meets the eye.

Problem: Not advocating for yourself during performance reviews

Advocating for yourself doesn't end once you've got the job, though. For individuals with impostor syndrome, it's tempting to think of performance reviews as justifying why you deserve to keep your job at all. However, it's important to you and your family's long-term financial security to use performance evaluations as an opportunity to showcase your contribution and ask for a raise.

Like an initial interview, consider an annual review as a chance to ensure that your compensation is aligned with the value you bring to the bottom line. And if your contribution isn't as robust as you hoped, impostor syndrome may mean your first instinct is to fall on the sword when in fact there may be actions your employer can take to remove any roadblocks you're experiencing.

Solution: Ask for what you need to succeed

In many ways, the principles of how to approach a performance evaluation are similar to a job interview. However, there is another aspect to think about — asking for impediments to your success to be removed. Impostor syndrome may lead you to attribute success to external factors like luck and mean that you are too eager to take the blame for things that don't go as well as you hope. Your goal should be to reverse those tendencies without sounding vain or defensive.

Related >> 11 Myths That Stifle Budding Entrepreneurs

Practice saying “thank you” when receiving a compliment and, if possible, tying the contribution in question to quantitative data. However, when shortcomings in your performance are pointed out, don't immediately assume the problem is you. Is there a policy change that would prevent the issue from arising? Is there a degree, training, or certification that your employer could pay for or provide that would put you in a better position to meet expectations?

While you should take responsibility for your actions, you should also assume your employer wants you to do well and is willing to put resources at your disposal to make that happen.

Problem: Comparing yourself to others

One of the defining characteristics of impostor syndrome is the tendency to compare yourself (usually unfavorably) to others. Especially with the rise of social media, you may have heard the saying that you end up comparing your worst day with everyone else's best days. If you're someone who feels like a fraud even when it comes to your successes, this tendency can be debilitating to your self-confidence.

Related >> Women, insecurity and money: Overcoming the confidence gap

And without even noticing that you are doing it, you may only be comparing yourself to those in your circle that you perceive as doing much better than you. This may lead to you discount or not even notice when friends, family, or colleagues are actually struggling — perhaps in areas you have mastered or in which you are experiencing success. Another factor you may not realize? Others experience impostor syndrome as well.

Solution: Mentor and be mentored

Turn comparison into something positive through mentoring. Rather than quietly admiring those whose success outstrips your own, reach out to them to figure out what they did to achieve those feats. If they attribute their accomplishments to luck or other external factors, you may have found an impostor syndrome soul-mate. Saying something about it can help you both feel better. If they can identify the actions that helped them succeed, you may have found a mentor. Perhaps spending time together would help you learn how to succeed in those areas too.

Similarly, reaching out to those who haven't yet attained the professional or personal finance goals that you have may help your self-confidence and sense of competence. Perhaps there is an entry-level colleague you could befriend or a younger family member who could benefit from your life experience. Not only could your skills and knowledge help them reach their goals, expanding the number of people in your life who can validate feeling like an impostor can help all involved overcome that feeling and own their success.

Related >> Getting real (and serious) about your financial future

Final thoughts

Feeling like a phony is not only a waste of time and energy, it can lead to burnout (as you try to overcompensate for your perceived lack of talent or ability) and fear of risk, even calculated risk. The strategies outlined above can help you deal productively with unrealistic feelings of inadequacy. For many, simply knowing that impostor syndrome is a real phenomenon that others experience can help inspire positive change in both attitude and action.

Have you encountered impostor syndrome? How has it affected your financial situation, if at all? Do you look for ways to help mentor others about their finances? How would you translate these solutions to help you improve your finances?

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Beth
Beth
4 years ago

As much as I question the use of labels like this, it changed my way of thinking when a coworker called me out on these types of behaviours. He said a of successful people feel like phoneys or undeserving of their success. I think it’s a balance. You can be grateful for what you have without letting people take advantage of you. You can own factors that contribute to your success (like certain types of privilege) while acknowledging that these advantages would be moot without your talent and handwork. If you’re the type of person who can’t say “thank you”… Read more »

Randy
Randy
4 years ago

Wow, just wow!!! That was an EXCELLENT article and something I struggle with myself. I have an awesome job at an amazing and growing company. They are basically taking over the east coast. I make an honest wage and what I do I feel like is okay (office job), but then I look at everyone else and what they make and it’s nothing. So I’m comparing myself to others based upon hourly rate essentially. But, although I think I make a decent wage, at times I feel like I do deserve more and come performance review time, which is in… Read more »

Beth
Beth
4 years ago
Reply to  Randy

I’ve been there — feeling like I should be earning more but afraid of being greedy and not having gratitude. “In these tough economic times” (a phrase that should be banished now, IMHO) shouldn’t I just be happy to have a job? But the employer/employee relationship is a business transaction. It’s not personal. Funny how we have no issues looking for a fair price on something we want to buy, but we’re hesitant to seek a fair price for our time. What I did was build a business case for myself. What value do I bring to the company, and… Read more »

Kalie @ Pretend to Be Poor
Kalie @ Pretend to Be Poor
4 years ago

I definitely wish we would’ve had more confidence to negotiate at interviews. When we did, the requests were easily granted. I only wished we’d asked for more!

Formative Fortunes
Formative Fortunes
4 years ago

Very insightful, id like to say that i do not suffer from imposter syndrome but it really shows that people need to stand up for themselves and believe that they are significant and unique!

Jo@SimplyBeingMum
4 years ago

I have never been great at accepting compliments – until I started to think that when you reject the comment and/or you put yourself down to the person giving the compliment, you are actually belittling them also. You are saying that their opinion is incorrect or that they have poor judgement. Whether I agree with the compliment or not now I just say ‘thank you’.

Debi
Debi
4 years ago

I remember sitting in a circle in 1st grade where the teacher was teaching us to read and asking each of us to read out loud from a giant sized book that she held. I remember thinking, these other kids can read but I’m just memorizing words. I hope no one finds out. Imposter syndrome? I never knew there was a name for it!

Debi
Debi
4 years ago

I would add that the best time to negotiate for a raise is not at the actual performance review but 4-6 weeks prior. At our company the amount of the raise is already set in stone by the time the review comes due. Best to sit down with your boss before he/she writes the review to make sure he knows what you’ve accomplished during the review period and how much you’ve contributed.

James
James
4 years ago

This is so true. I had a doctor tell me the other day, after years of practicing medicine, that he still feels uneasy and like he’s just faking it. He’s a brilliant doctor, but it’s just his mind making him feel like an impostor. He doesn’t feel like he deserves the stuff that comes along with being a professional physician.

I never really thought about how this could be applied to someone’s financial goals, but this makes a great deal of sense.

Mike
Mike
4 years ago

I agree with Beth – one needs a balance. Luck does play a large role in careers (much larger than most people will admit) but so do hard work, knowledge and experience. I have felt imposter syndrome at various times in my career and it is important to recognize it and not have too much false modesty. However, we have all met the opposite: the person who exaggerates their accomplishments and hogs the credit when, in fact, their abilities are mediocre.

Financial Samurai
Financial Samurai
4 years ago

I encountered impostor syndrome in my 20s. When I turned 30, I finally said screw it, I feel like I belong, and it’s time to earn what I deserve.

So much is psychological. But I do believe ones 20s is there to learn.

S

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