Some decisions are tougher than others, but a good strategy makes all the difference.
Throughout your life, you’ll make plenty of choices about money. Some daily decisions won’t be very significant like whether to buy that new sweater you’ve been eyeing. But others will carry a much heavier price tag and the weight of more responsibility. Some of the biggest decisions most people make in their lifetimes include purchasing a home, taking out student loans, starting a business, or having children. And you may find that the greater the financial impact, the more difficult it can be to make a financial decision.
With big decisions, it’s essential to have a solid strategy for approaching them.
Whenever there are important choices to be made, chances are you have options. But in some cases, you’ll have way too many choices to sort through, which can cause you to feel overwhelmed. One idea to reduce your stress? Make a pros and cons list, with each point supported by data such as interest rate or other costs and benefits.
Tough decisions are easier to weigh when you know your financial goals and understand just how you’re tracking against them. “Most of us have competing timeframes and goals,” says Heather Winston, financial professional and product director for Retirement and Income Solutions at 91®.
Use your goals to navigate what happens in the future, which can help you make decisions.
You may appreciate your sibling’s dating advice. But when it comes to money advice? For that, you may need insights of a financial professional.
“Be prepared for some potentially thought-provoking conversation,” says Winston. “When financial professionals are trying to understand how they can best support you and your goals, they may need to pry a little. This is just so they can provide guidance and a tailored course of action.”
Yes, being spontaneous is one of the things that makes life exciting, but making split-second decisions on major purchases is something to shy away from. It’s important to align goals both long-term and short-term. For example, it might seem like a great idea to buy a house to stop paying rent, but do you have plans to move to a new city in a couple of years? Do you have enough money for a down payment and other expenses, or will your purchase leave you “house poor”?
You may hear the advice to be less emotional about your financial decisions, but it’s much more important to be aware of your feelings without letting them make the decision for you.
“Recognize that your experience is not like that of the people around you,” Winston says. “It’s yours and what you make of it is all under your control.”
A version of this article was previously published on HerMoney.
What’s next?
Interested in talking with a financial professional to decide your next steps? Check with your HR contact to see if your company’s retirement savings plan offers financial professional services. Or we can help find one near you.
