Having to make big, important financial decisions is just something that every adult has to do, from buying a home to investing in a business or even just budgeting for the weekly grocery shop. It’s something we have to do all the time, and some of those decisions are easy to make. Others, however, can be a lot harder, not just because of the amount of money involved, but because the consequences – good or bad – can ripple way into the future and cause all kinds of issues (or give all kinds of rewards). It’s no wonder it can be a challenge to make big financial decisions with any kind of confidence.
However, these decisions still have to be made, no matter how difficult they might be or what the outcomes are, so what can you do to ensure that you’re making the right choices and that you can take the path you want with confidence? It might sound impossible but it doesn’t have to be – keep reading to find out more.
Know What The Consequences Are
Before you make any kind of start on making any kind of decisions, what you’ll really need to do is take some time to think about what’s at stake – remember, not all financial decisions are created equal, and some, like choosing what kind of laundry detergent to buy at the supermarket will be low risk, while others, like choosing what kind of mortgage to opt for, is a much bigger investment and commitment, so it’s higher risk.
The thing to do is to break your decision down into layers. Is it a short-term goal with manageable risks or is it a long-term commitment that could impact your retirement, lifestyle, or generational wealth (that is, what you can pass on to your children and grandchildren, for example)? Once you know how serious the decision is (or not, as the case might be), you’ll be able to spend the right amount of time on it and that’s going to help you get it right.
Ask Questions
If you’ve got to make a big decision, it’s wise to ask some big questions – that’s one of the best ways to get to the heart of the matter and to get the answer you need (even if it’s not necessarily the answer you want). You’ll need to be brutally honest with yourself as well, otherwise the entire exercise will be pointless. Some of the questions to ask include why am I considering this? What’s the worst-case scenario? And can I handle it if things don’t go as planned? Am I financially ready for this? If not, what steps can I take to get there?
The goal here isn’t to talk yourself out of or into making a decision, but instead it’s to give you the knowledge you need to make the decision in the first place. The fact is that every decision, no matter what size or what the consequences are, comes with risks, and it’s about facing those risks head-on if you want to be confident about the choices you’re making.
Get Some Help
While it’s tempting to deal with big financial decisions on your own, you’ve got to remember that the consequences probably won’t only affect you, so why not get some help when it comes to making those choices in the first place? It’s only fair if other people are involved, plus they do say that two (or maybe more) heads are better than one, and at the very least you’ll be able to get different perspectives on the options and outcomes.
Let’s say you’re buying property, which is a milestone decision that’s as exciting as it is daunting. When you’re in that situation, it’s not just about finding the perfect home or investment opportunity; it’s about making sure you’re making sound financial decisions because this is something that can affect you for years to come – that’s why working with a real estate lawyer can be a great idea. They’ll be able to ensure contracts are airtight and fair, they’ll take a look at any financial issues, and they’ll guide you through the fine print, so you can feel confident about moving forward without making mistakes.
On top of professionals, you can lean on your network as well – talk to friends and family members who’ve been through similar things and had to make similar decisions because their experience, wisdom, and the power of hindsight can give you a perspective you might not have considered before.
Check The Numbers More Than Once
When you get right down to it, confidence comes from preparation, and preparation comes from understanding your numbers and what’s expected of you financially – that’s got to be the key to what you want to achieve and how you’re going to make sure you’re making good decisions in the end. That’s why you’ll have to take a long, deep look at the costs, benefits, returns, and anything else that might be part of your decision-making, either in the long term or the here and now.
There are some great budgeting tools around to help you work out what’s what, and it’s a good idea to explore the potential options and see which one or ones you like best – even if you don’t need to use it right now, you’re sure to need it in the future, and having it ready (and knowing how to use it) is really going to help you get started sooner.
Remember that there will more than likely be hidden costs you’ll need to factor in to any financial decision you have to make (like taxes and fees, for example), so that’s an important element. And while you’re doing research, what about checking out market trends? That way, you’ll know whether now is the right time to invest your money into whatever it is you’re thinking about, or whether it might be better to wait – just a few months or even weeks can make a risky decision a much more stable one. And even if you’re happy to go ahead, the more you know, the fewer problems and surprises you’ll have down the line, and that can only be a good thing.
