Making Better Financial Decisions – 4 Simple Steps
Life is full of decisions. Some are simple and some are not. Some are more important than others. Financial decisions have a direct effect on your quality of life. So it pays to get them right in every sense of the phrase.
Here are 4 tips you can use to improve your financial decisions making. Starting today.
Think about who you are and what your goals are
It may be a cliché to say that everyone’s different, but it’s also true and this individuality is reflected in the decisions we make. As well as our personal preferences, age also plays a part when making financial decisions. As children our goal may be as simple as saving up enough money to afford a new toy. As young adults our immediate goal may be a deposit on a house. As we get older, caring for our children and planning for retirement may become our most important priorities. So to make effective decisions, whether they are financial decisions or otherwise, we need to understand what our aims are and whether they are short, medium or long-term goals.
Don’t sweat the small stuff – but don’t ignore it either
On the one hand, the old saying “Look after the pennies and the pounds will look after themselves” has stood the test of time because it makes sense. Sometimes you barely notice the small costs here & there slipping by, until they turn into a unexpectedly large amount. On the other hand, many people have hectic lifestyles and would find it an enormous challenge to make note of every penny they spend and on what, let alone take the time to analyse whether each and every purchase was the best deal possible. This is where a little common-sense can go far.
There is no need to do your shopping at 4 different supermarkets to get the absolute best price on each individual item. It can, however, help to keep an eye your day-to-day spending and think about where you could cut costs without too much inconvenience. For example, the savings you can make by taking a reusable bottle of water on the train to work instead of buying a bottle of water at the station can soon add up and give a pleasant boost to the family finance.
Your personal wealth is your responsibility
Once you are an adult then you are accountable for your own health, wealth and happiness. This may seem like a daunting prospect, but it can help to break it down into manageable areas. You can set a budget so that you have more money than month. You can make notes of when financial purchases are due for renewal (mobile phone contracts, insurance, mortgage deals ending etc.) and find the time to look for the best offers; at least for the larger purchases. You should also plan to ensure that there are funds in place to meet medium to long-term needs, whether it’s replacing significant household items or funding an enjoyable retirement.
Getting the right financial advice can more than pay for itself
Just because something is your responsibility, it doesn’t mean that you have to deal with everything on your own. Some people find looking through the financial sections of the press can be a baffling and even intimidating. Mortgage approvals, interest rates, market developments, mergers and acquisitions etc. – it can be difficult to make sense of what it all actually means. Then there will be discussions with family, friends and colleagues, some of whom may have their own advice to offer. With all the best intentions, there’s no guarantee that it’s the right advice for you. Fortunately a professional financial adviser can help make sense of the headlines, jargon and tips from friends and help you to build your own plan for investing in your future. This advice can be, literally, invaluable.