Throughout our lives, we will be faced with numerous decisions. Some will be big; others will be small. Generally speaking, financial decisions are the most common, and toughest. The issue with financial decisions is that one wrong call, and you can end up in a tough financial situation.
I have experience with making poor decisions that have cost me money. Likewise, I’ve made good financial decisions that have brought positive benefits. Today, I’m going to pass on some advice and tips to everyone reading this. I’ll go through some things you should do before you make any big decision. This advice should help you make the right choice, and keep your finances in good shape.
But, before I go into that, I want to start by talking about some of the biggest decisions that affect our finances. Below, I’ve listed a few of these, that almost everyone will deal with at one point in their life:
Choosing A Career
Choosing your career is a huge point in your life. Most people end up making this decision when they’re still in school. You’re around 17/18 and have to decide what you want to study in University of College. Then, you get your degree, after a few years of studying, and are ready to enter the world of employment. Other people don’t follow this route and go straight to work when they finish school. Either way, choosing a career is going to be the first big financial decision you’ll make in your life. It will set you up for the rest of your life, and have a bearing on how much you’ll earn. Making a wrong decision can mean you end up in a dead-end job, struggling to earn enough to live comfortably. As shown here http://www.salary.com/, there are some jobs that pay surprisingly badly. The career you might be thinking of going into could pay very poorly, so it’s important you do your research.
Buying A Car
Again, when you’re around the 17/18 age range, you’re presented with another big decision. Do you start learning to drive? Being able to drive a car is a very important skill to have. It lets you get around a lot easier, meaning you can drive to work, etc. However, paying for driving lessons is expensive enough as it is, let alone paying for a car! So, you have to come to a final decision as to what you want to do. Is it worth buying a car at all? Some people live in city areas with reliable public transport, meaning a car isn’t much use to them. But, other people may see a car as essential. If you do decide to buy one, you then have to think about how you’ll do it. Will you buy a new or used one? How much will your budget be? There are loads of questions you have to ask yourself before you go out and buy a car. If you do things the wrong way and overpay for a car, you can end up in financial distress.
Buying A House
Eventually, the majority of people will move out of their parent’s house and buy something of their own. This is where you’re presented with the biggest financial moment in your life. Buying a house costs loads of money. You’ll be hard pressed to find a transaction that requires you to spend more. Naturally, the main decision is whether or not you should buy a house. Then, you have other questions to ask yourself too. What kind of house are you looking for? How many rooms do you need? What location? The list goes on and on. It’s not something you can rush, and it will take a lot of time to plan out. Get things wrong, and you can end up losing loads of money. People all over the world lose hundreds of thousands of dollars on poor property purchases.
Planning For Retirement
Making retirement plans is something everyone should do as early as possible in their career. If you don’t plan for retirement, you’ll end up with no money when you stop working! The main thing to think about here is what investments you should make. You should invest in something that will grow in value throughout your years of work. Then, when you retire, you can sell it and bring in all the money. Also, you have to consider pensions, and savings accounts. Don’t overlook your retirement plans because they’re a huge financial decision. You need to set yourself up for life after work, so bear that in mind.
Naturally, every person may have additional choices to make in their life. You could have personal money problems that demand your attention. But, the things I’ve mentioned are going to be present in everyone’s life. They’re decisions that you can’t run away from and need to be prepared for.
And, this brings us nicely to my top tips to help you make financial decisions. If you carry on reading, you’ll find my advice below:
Take Your Time
The number one reason behind bad decisions is that they’re rushed. If you don’t take your time, then you’ll obviously make the wrong choice. This can be related to every scenario I spoke about earlier. When choosing a career, you could rush into it without doing any research. So, you may end up studying a subject with poor career prospects. Or, working for a company that pays poorly and offers no training or room for growth. Likewise, when buying a car/house, lack of research can lead to you making a poor choice. The car/house you buy might need expensive repairs upon further inspection. Thus, you end up forking out loads more money. If you’d taken your time, you could’ve inspected things and found these hidden issues. And, rushed retirement investments can lead to you losing a ton of cash and ending up with nothing to live on after work. So, make sure you take your time whenever you’re presented with a big decision.
Seek Professional Guidance
I’m shocked at how many people are too afraid, or proud, to seek guidance. Asking for professional help is the most sensible thing you can do. What better way to guarantee you make a good decision than asking someone with experience in the field. For example, speak to a career’s advisor if you’re struggling to choose a career. They’ll give you advice and tell you what career might suit you the best. When buying a house, you can seek advice from so many people. One of the hardest parts of buying a house is financing it. Typically, you have to deal with a complicated home loan application. As seen here https://smbia.com.au/your-situation/home-loans/, there’s plenty of advice on home loans. Professional guidance can help you make the right choices and finance your home. Similarly, speak to a broker if you want to make an investment for your retirement. Or, a financial advisor if you’re thinking of opening a savings account. My point is; you’re in a much better position if you ask for help.
An easy tip to make decisions easier for you is to create a list. Draw up a list of the pros and cons of what you’re doing. This will help you see whether something is beneficial for you or not. If you have some career options, think about the good and bad points of them. Do they pay well? Is there room for growth? Slowly but surely, you’ll find a career that has lots of pros and very few cons. Similarly, look at the pros and cons of owning a car. A big pro is that you can drive yourself everywhere and don’t rely on public transport. A con is that they cost a lot to run. Apply this tip to every big decision you make, and watch it transform the way you live your life. I’m telling you; everything is a lot clearer with a pros/cons list. You’re able to see how you’ll benefit from the choices you make. You may see that buying a big house has more negative points than positive ones. So, you can stop yourself from making a poor decision, and settle for something smaller. Of course, a lot of you are probably thinking the same thing right now. You’re wondering what happens when something has a similar amount of pros and cons. Well, with tricky decisions like this, you should consult the other tips I’ve provided too. Combine all three, and you’ll make the right choice.
I hope that everyone reading this has found my article useful. It’s remarkable how many people are underprepared for making big decisions. So, I thought it would be helpful to talk you through some of life’s biggest moments, and how they affect your finances. The tips I finished with are designed to help those decisions become easier for you. As mentioned in the point above, it’s important you don’t rely on one tip. Use all three, and you’ll make good financial choices!