5 Questions to Help You Make Better Financial Decisions
| Photographs By JGI/Jamie Grill
Let’s say you’re craving a brand new car — even though you just paid off Old Reliable and should be enjoying payment-free months for the first time in what feels like forever.
Yet, seeing all the shiny new SUVs in your neighborhood is enough to keep you up at night dreaming of the day you’ll own one, too. Soon enough you find yourself sitting on the opposite side of a salesman’s desk, ready to sign on the dotted line for another deal with the devil.
Halt! Hasty Decisions Lead to Financial Losses
Living in the electronic age, we’ve grown used to, and now demand, instant gratification. This overindulgence is murdering our wallets. We want what we want and we want it now. And thanks to credit cards and life at the speed of text, we’ve forgotten how to be patient, or to hold out for what we need, rather than surrendering to our fleeting wants.
But buying just to buy will always dig you deeper into a hole you never want to be in. Unless you’re independently wealthy, you have responsibilities that you simply cannot ignore: Your rent or mortgage, car payment, education, food, gas, shelter — all are essential to modern life, and none is free.
Often, the two nickels you have left over aren’t enough to rub together, let alone pay for the movie you want to see at the theater, or buy on DVD four months later.
But that doesn’t stop you, not when your credit cards make the purchase as simple as signing your name or pushing a button.
Rushing Headlong into Instant Gratification
When you rush into purchases, large or small, you’re throwing money to the breeze. The movie that you put on your card was awesome! And you LOVED it. But that was $15, including the snack, and that’s if you went alone.
And what did you get out of it?
Two hours of entertainment, if you’re lucky.
Sure, you satisfied your impulse to see a film, and did what you wanted to do. But you lost money to your impulsive need for instant gratification.
The same thing applies to buying a new car you didn’t need. Your old car worked fine. It just wasn’t as fashionable as Mrs. Jones’. It’s pride and vanity that send you to the dealership, not necessity.
You rushed forward, and were temporarily satisfied. But now you’ve lost. Now you will have to worry about where the money will come from to pay the babysitter next week, and maybe every month after that.
Isn’t constant peace of mind better than temporary gratification?
Pausing Brings Financial Peace
Slowing down long enough to put perspective on where your money is going and what you’re really going to get from your purchases will let you stop floundering with your finances.
Stopping to think will give you time to let the embers cool to gray; time to think about what you’re truly getting from purchasing that SUV, or going out for another expensive movie or dinner.
We buy things because they make us feel great in the moment. But the half-life of that joy is short, and diminishes with every purchase. Sure, you will be happy for a week or even two, but the footprint of those purchases will leave you feeling guilty and resentful.
Stop long enough to question your motives and you can eliminate the cycle of guilt, and earn the peace of mind that comes with being in control, rather than being at the mercy of your emotions.
Ask yourself these 5 simple questions before making your next purchase, and you will end the financial floundering and the guilt that follows.
5 Questions to Ask Before Making Financial Decisions
These questions will help you understand the whys behind your buys:
- What will you gain from this purchase?
- How long can you expect your happiness to last?
- Are there lower-cost alternatives that will accomplish a similar feeling?
- What else can you do that will bring you as much joy as what you’re wanting to buy?
- How much will this purchase really cost, in terms of more money, time, or loss of funds from another area of your budget?
Use these questions to help you see the true cost of impulsive spending and bring you financial peace of mind, one smart decision at a time.
The views expressed in content distributed by Newstex and its re-distributors (collectively, “Newstex Authoritative Content”) are solely those of the respective author(s) and not necessarily the views of Newstex et al. It is provided as general information only on an “AS IS” basis, without warranties and conferring no rights, which should not be relied upon as professional advice. Newstex et al. make no claims, promises or guarantees regarding its accuracy or completeness, nor as to the quality of the opinions and commentary contained therein.
Licensed content is provided for informational purposes only, and is not intended to represent any endorsement, expressed or implied, by USAA or any affiliates.