Thinking you’re bad at finance is a ‘self-fulfilling prophecy,’ a money expert says. She suggests 3 ways to change that.

• Financial educator Abi Foster said she calls out friends who say they’re bad with money.

• “They convince themselves, and it becomes like a self-fulfilling prophecy,” Foster told Business Insider.

• She shares three things people can do to improve their finances.

People are often bad with money because they assume they are bad with money.

That’s the view of Abi Foster, an accountant, financial educator, and author of “The Money Manual,” based in the UK. She told Business Insider she often calls out friends who say they’re not good with their finances.

“They convince themselves, and it becomes like a self-fulfilling prophecy,” Foster said.

She listed three things people can do to change that.

Foster said the language we use when talking about money makes all the difference to our spending habits.

“Young people pick up the vocab and the emotion that their families have, and so their minds are set from such a young age,” she said, adding that often they end up “fearing money.”

Foster learned about finance through her training to become an accountant, but said you don’t need certain training to understand money.

Before jumping into investing, you should even just start by downloading some trading apps and having a look at how they work, Foster said.

Holding all of your money in a checking account is “literally handing money over to banks,” she said.

Foster said your savings account should have enough to cover three months of living expenses, but no more than 12.

When it’s sitting in a bank, you’re wasting your money because inflation will eat into its value, she said.

Foster said people could invest in stocks related to fields they are interested in. She gave the example of someone who is interested in Formula One investing in a stock like Ferrari. For the long term, Foster recommended people look at index funds, such as the S&P 500.

“I think planning for our future selves is where we always have to take an active role,” she said.

If you’re in the financial position to do so, it’s worth increasing your contribution to your 401(k), IRA, or pension, Foster said.

She said these are “investments,” adding that those who set aside the minimum are potentially losing thousands in compound interest by the time they retire.

Read the original article on Business Insider