Tennis icon and entrepreneur Venus Williams has racked up more than a few wins in her life, both on and off the court.
Throughout her career, she’s learned plenty about making smart investments and starting her own ventures, like her interior design firm, V Starr. But overall, one of the most important money lessons she’s learned is “to have confidence in your own financial decisions,” she says.
Building that confidence comes from having the ability to make your own financial decisions, a privilege women didn’t always have.
In partnership with SoFi, Williams honored the 50th anniversary of the Equal Credit Opportunity Act in October. The legislation, passed in 1974, made it illegal for banks and financial institutions to deny loans or other products to customers on the basis of their gender, marital status, race or other identifier. In effect, it allowed women to get credit and open bank accounts without a male cosigner.
“It’s important to understand the significant power of financial planning,” Williams told CNBC Make It in an email. Doing the research on your investments and weighing the risks of big money decisions on your own can help you “feel pride in the decision you make, and even if it proves to be a mistake later on, you learn and grow from it.”
How to learn from your mistakes and gain confidence in your financial decisions
Farnoosh Torabi, financial expert and host of the Webby-winning podcast “So Money,” agrees that mistakes can be useful learning opportunities.
“Real growth comes from experience, including those hard-won lessons,” she tells CNBC Make It. “Mistakes are invaluable for teaching resilience and helping you get clear about your goals. Every setback gives you a chance to build skills and self-awareness, which ultimately make you better at managing your money.”
Some money mistakes have easy fixes. If you overspend on impulse buys, you might implement a no-spend week to recalibrate. Other mistakes may be harder to fix, such as catching up on retirement savings if you wait too long to start investing.
When you mess up, start by understanding the actual cost of the mistake, Torabi says. That may mean returning a purchase or adjusting your budget. If there’s nothing you can do in the moment, make a plan to move forward and minimize the damage.
Torabi gives an example of a time she and a couple of partners invested in a startup that wound up “being a financial flop.” To make up for it, she added more workshops and events to her calendar to make her money back.
“Creating more income was something that was within my control, so that’s what I focused on,” she says. “Coming out of that setback, I also learned an important lesson: Hope for the best, but plan for the worst when starting a business with multiple partners involved.”
You’ll only get opportunities to learn and build confidence by educating yourself and trying, though.
It can be intimidating to take the first step to invest, start your own business or make a major purchase like a house or car. But “at the end of the day, you know your situation best and are the best-equipped person to ultimately make that decision for yourself,” Williams says.
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