9 Ways to make and trust your financial decisions

Choices are great. I love having choices. Who doesn't? But decision-making is not easy. Moreover, big financial decisions can leave you feeling overwhelmed and anxious.

Have you noticed how many products we have in stores nowadays? New and improved? Blah Blah Blah. This is probably why I hate big supermarkets. The other day I was going through the washing powder aisles and I found that they have 22 different products. Crazy! From creams, liquids, concentrates, tablets, powders, bio & non-bio, the list is endless.

Just how much of a your time is caught up in making choices in consumer goods and services and how much time does that take from living an authentic life in family and in community? The massive choice that are given nowadays do not suit everyone. It can be upsetting and make a woman panic. In fact, a study by Columbia University in 2000 revealed that we cannot function when given too many options. 

I've learned that even though money gives me choices, it actually makes decision making more complicated. And sadly, the most common coping mechanism is to not make a decision at all. Instead, we fall into the same old patterns or habits.  

One of my friends was telling me that the main problem for her for choosing things like pension scheme, private health care or schools for her kids is that it is extremely difficult, often even impossible, to compare the options. She says in many cases it is deliberately done, so that the companies can create the illusion of choice, confuse the consumers and effectively avoid competition. And unlike products you buy at a supermarket, it often takes time to find out if you've made a good choice or not. And if you did it's usually difficult, if not impossible, to switch to a different "provider".

Whether it’s thinking about paying the mortgage, buying groceries or saving money a lot of brain power is devoted to making financial decisions. Unfortunately there's nothing we can do to avoid these choices. All we can do is use the resources available to us to make the best decision possible, and move forward.

The use of tried-and-tested decision-making strategies, has been shown to cut failure rates by nearly 50%, suggesting that with applied technique, making your choice needn’t be an intimidating task.

This following list can serve as a guide to help you reach the best conclusion for whatever hard financial choice you find yourself up against. Here are 9 Ways to make and trust your financial decisions.

1.  Knowing your why can help prevent aimlessly misdirecting your money on things that you don't need and help you focus it on the areas of your life that matter the most. Knowing your why aligns your money with your values and serves as the foundation for the financial goals that support the life you really want to live. Let’s say your answer is security.  Now ask: Why is security important to you?  Answer and repeat until you are settled within.

2.  The right financial decision is the one that you understand. The right financial decision is the one where you understand what you're doing, why you're doing it, and how it's going to improve your life. When you're able to give a simple explanation of your strategy to a family member or friend then you got it.

3. Because your decisions have long-term implications, you should take all the time you need to become informed. But by educating yourself, you will give yourself the best chance of making the right decisions. Consider the alternatives, examine your motives and how you might recover from them if anything goes wrong. Factor that into your ultimate course of action.

4. Making big financial decision is tough especially when it feels like the choice will change the direction of your life. Space out your financial decisions instead of making too many at once and overwhelming yourself. Break them down into small pieces with the day-to-day actions. Your goals goals will help you to see the vision clearer. This could help you clear your mind and ultimately find the right solution to your tough decision.

5. If there’s one mistake you don’t want to make, it’s letting your emotions control financial decision-making. Emotions can screw up your decision-making. If you let emotions control financial decision making, you will lose out almost every time. Emotions aren’t a bad thing. But at the same time, you can’t let your emotions affect how you make financial decisions. Always check your emotions and avoid letting them influence your financial decision.

6. Don’t forget to consider your gut feeling to each possibility: there is scientific evidence to back up the idea that our instinctive hunches should be trusted. If you make a choice that doesn't align with your inner gut feeling, it's important to consider how you'll feel about that decision after it's made.

7. Popular wisdom suggests pausing for a moment before buying an item and asking yourself: “Do I really need this?" If you ask yourself the “want” or “need” question before making any financial decisions, the odds are that you’ll make better ones.

8. Ask others for advice. A fresh perspective can help you see difficult decisions from a different angle. Being on the same page about money with your family is a money decision that can positively impact the finances and your most important relationship. Taking the time to talk openly about money and both having clear roles around the household finances are conversations and decisions that are valuable at every stage of the relationship.

9. You will eventually have to decide on something. Don't make a tough decision more difficult than it has to be. You live and you learn, right? Sometimes, it’s more important to just make a decision of some kind than to not make one. Remember, you aren't doomed to live out your decision for the rest of your life. You can always change the course of your life. 

You will always be faced with difficult financial choices to make. By following these tips, you can tackle these and any tough decision that comes your way.  Following them may not protect you from making mistakes in the future, but you'll make fewer and less costly ones.

How do you make financial decisions?

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