Your Money Decisions

8 Factors Affecting Your Money Decisions

Think about the last item you bought. What Factor affected your decision?

1. Emotions: Was it how you felt before you bought the item or how you felt after?
2. Friends and Peers: Did you buy it based on your thought of what others would think of your purchase?
3. Customs, Traditions and Habits: Do you always shop are the same store?
4. Family Members: Who influenced your purchase?
5. Latest Styles and Fads: Are you trying to stay with the current trends?
6. Advertising: Does media and promotions impact your decisions?
7. Incentives: Do you only shop when things are on sale?
8. Your Values and Confidence: Was it something you wanted?

Which one do you think has the biggest impact on your decisions?

Can you afford it?

Another important factor that often gets forgotten.

Tips for Making Good Money Decisions

1. Think about your thinking – Do you spend time thinking about why you are buying the item?
2. Your Opportunity Cost – What are you giving up in making the decision? What else could you purchase or invest with your money?
3. Future Trade-offs – What could be different if you wait?
4. Can you afford the cost? Do you have the money it pay for it or are you using credit?

Taking Control: Goals and Balance

• Your Happiness – consider what will make you happy today, tomorrow, next week or next year.
• Instant Gratification – want it now vs. plan for the future?
• The Bigger Picture – having a plan for the future will help you handle and manage your money.
• Money Can’t Buy Happiness – true, it is also true that lack of money can create problems. “Money is like air, it’s easy to live when you have some.”
• Goals Can Make a Difference – what is the life you want?
• Money is a Means to an End – money is used to exchange for things you need and want; food, clothes, shelter.

Things to Think About

• Which financial decisions do you find the most challenging to make? Why do you think they are challenges for you?
• What is the biggest “money mistake” you made in the past?
• What is the one purchase you would like to make in the next 5 years?

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** Money and Youth – A Guide to Financial Literacy by Gary Rabbior was used as a reference for the above post.