Making Better Financial Decisions

financial decisions

Making The Best Of Financial Decisions We All Face.

When it comes to making good financial decisions many people have questions. It’s possible that you are facing certain financial decisions for the first time and are unsure which course is best.

Let’s face it, for most of us, finances are both confusing and a little frightening. Will you make a good decision or one that will have a “gotcha” that costs you big time? Here is some insight into two often asked financial questions to help you make the best financial decisions possible!

financial decisions

Should you borrow from family or get the money from a legit lender?

Your in-laws say they’d be happy to front you the money to buy new furniture for the kids’ room — and they won’t even charge you interest. What’s wrong with that?

“If you need a low- or no-interest loan badly enough to borrow from relatives, you probably can’t afford what you’re buying,” says Michael Haubrich, a financial advisor in Racine, Wisconsin.

Plus, there’s often more than money at stake with the Family Bank:

What if you miss payments?

What if the “lenders” start questioning your other money and parenting decisions?

Unless the money is offered as a gift — with no strings attached — you should borrow from a bank or a credit union. Also, think about checking the financing options with the retailer where you plan to make a purchase; you might even get a better deal.

Bottom line: Relatives and money generally don’t mix.

Should you make purchases by credit card or pay by debit card?

Credit cards have a number of advantages in this face-off. They let you dispute payments if the items you buy are unsatisfactory or (in the case of mail-order and online purchases) never arrive.

Many offer rewards, such as cash-back bonuses and frequent-flyer miles, and some provide insurance in case a product is lost or stolen. But if you don’t pay the whole balance on every statement, you’ll be subjected to monthly finance charges.

Debit cards are fine for basic purchases (such as groceries and gas) that you might otherwise pay for with cash or by check.
But it’s crucial to limit their use to merchants you know and trust, since you’re giving them electronic access to your checking or savings account, notes Gerri Detweiler, author of The Ultimate Credit Handbook.

Monitor your bank account regularly for mistaken or fraudulent charges, and report them right away. And make sure you have enough money in your account to cover the charge, or you’ll have to pay overdraft fees and your account could be frozen.

Bottom line: Stick to small (and local) purchases for your debit card. Use credit cards for all your other charges.
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Best Choices In Longer Range Financial Decisions

Everyday financial decisions are very important and carry a big positive impact when we consistently make good choices. Likewise, if we consistently make poor financial choices in day to day decisions there is a big negative impact.

Now we are going to look at a discussion of some of the longer range financial decisions we all face to help you make the best decisions possible today for down the road.

Don’t put it off

Waiting to make decisions about your wealth can have tremendous consequences. Imagine someone you know putting off dealing with financial questions, and passing away before getting them answered. Think about the impact on their family of not setting up an estate plan to properly distribute assets to heirs, or not having an adequate insurance plan in place before their passing. Such decisions are easy to put off in our busy day-to-day lives, but acknowledging their magnitude and influence on our financial health is the first step in taking action.

Identify objectives

“Begin with the end in mind” – Stephen Covey

The second step is figuring out what you want to accomplish with your finances. We call this being Intentional about your wealth. Getting this clarity helps narrow down the best strategies available to allow you achieve your goals, and to keep you focused on what you seek to accomplish.

This is particularly relevant when it comes to making investment decisions. A good investment strategy is one that you are sure of, so that you can take advantage of the good times in the market—and one that you’re confident will protect you in the bad times. That way, when the inevitable market corrections comes, you know you’ll be properly positioned…

…Identifying financial objectives early on allows you to focus on the good options by being clear on what you want to achieve—thereby helping you take decisive action.
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What financial decisions are you facing right now? Do you feel ready to make good financial decisions?

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