Self-confidence is a bit like the running water in your house. You may not know every detail about how it works or where it comes from, but it’s painfully obvious when it’s not there. Like when your water is shut off, a dearth of self-confidence has a huge negative impact on your health and lifestyle. Fortunately, there are things you can do to shore it up.

What is confidence?

In everyday conversation, self-confidence is often confused with self-esteem, and it overlaps with the less well-known term “self-efficacy.” However, psychology gives each of these terms a specific definition. It’s helpful to distinguish among the three:

• Self-Efficacy: This term, as defined by Albert Bandura, a Canadian-American psychologist, refers to your belief in your ability to accomplish specific tasks. If you believe you’re capable of cooking dinner or completing a project, this is reflective of high self-efficacy. People with low self-efficacy often put less effort into a task if they don’t believe they’ll succeed at it, increasing the likelihood of failure.

• Self-Confidence: In contrast, according to Dr. Bandura, self-confidence is more of a general view of how likely you are to accomplish a goal, especially based on your past experience. When you practice playing piano, you increase your confidence in your ability to play the piano. This can also apply to how likely you believe you are to be accepted in a social group. If you’ve been made fun of for your underwater basket-weaving hobby, you might be less confident sharing it with others next time. Self-confidence and self-efficacy are both rooted in experience, but self-confidence reflects a broader view of yourself, rather than your confidence in specific tasks.

• Self-Esteem: The term most often confused with self-confidence is the one perhaps least similar to it. Self-esteem refers to a belief in your overall worth. Broad statements like “I’m a good person” fall into this category. Self-esteem is one of the levels of Maslow’s hierarchy of needs, and improvements to self-confidence can contribute to your broader self-esteem.

These concepts overlap, and psychologists disagree about where the lines are between each one. You can have enough confidence to believe that you’re capable of learning how to play a new game, for example, while simultaneously lacking the self-efficacy to believe that you’ll be any good when you first start. Likewise, you can have zero confidence in your ability to cook while still believing you’re a good person and deserving of love.

[Like what you’re reading? Sign up here for the Smarter Living newsletter to get stories like this (and much more!) delivered straight to your inbox every Monday morning.]

High confidence leads to more chances to improve

Self-confidence is your belief in how good you are at something, but it’s not a measure of your actual skill. So why does it matter if you believe in yourself? According to Charlie Houpert, the author of “Charisma on Command” and the founder of a 2.7-million-subscriber YouTube channel of the same name, confidence doesn’t just make you feel better, it also helps you take risks to make tangible improvements to your life.

“Internally, true self-confidence will lead to more positivity, happiness and resilience,” Mr. Houpert said. “Externally, high self-confidence will lead to taking more risks, which directly correlates with reaping more rewards.”

The “Oxford Handbook of Positive Psychology” puts it another way: “If the person lacks confidence, again there will be no action. That’s why a lack of confidence is sometimes referred to as ‘crippling doubt.’ Doubt can impair effort before the action begins or while it is ongoing.”