Financial vs. personal decisions

The best financial decision isn’t always the correct one to take. Your personal decisions need to reflect an understanding of your finances, but a commerical reality isn’t the only reality to consider.

Your personal decisions need to be unique, based on your life’s needs.

Your financial wellbeing ultimately depends on you and only you. It depends on how competently you manage your own money.

The decisions you make today will affect your future prosperity.

You therefore should learn how to take control and don’t let money control you.

However, to live a fulfilled life, you can’t entirely spend it pursuing money and financial gain.

You can’t spend your life solely making the best financial decisions. Other personal factors and considerations are crucial to ensure you live a fulfilled and balanced life.

It’s about mapping your money to your life, not spend your life chasing money for money’s sake.

What is important, is understanding the financial factors that are involved in your own personal decision making process.

Financial factors are just one part of a bigger picture.

What factors influence your personal decision?

Family values – What is most important for your children, partner and parents?

For example, saving into a pension for your children is a great financial decision, but perhaps paying for sports clubs is more important to your children’s wellbeing, development and quality of life. But are extra toys more important? This article pretty much sums up the madness of the UK toy buying craze!

A spacious, reliable and safe care is essential for a family, but can you get one that is 7 years old, rather than brand new on finance?

A family holiday is a great way to build lasting memories, but do you have to go to Disney World every year? Can you truly afford it? Will your family’s finances be better served diverting your resources to other areas?

Funding your daughter’s wedding is no doubt a very proud and rewarding part of your family life. But will the wedding still be lovely and memorable if they have a budget of £10,000, rather than £20,000? Could the other £10,000 be put to better use helping them buy a home or start a business.

Perhaps your parents need financial support and care in later life. This could restrict your earnings potential or divert some financial resources from saving and investing. But is the best financial decision really the right one? The best financial decision would mean turning your back on your parents.

With all of these decisions, it is obvious that spending less will leave you with money for other purposes. You don’t want to become a miser, but you need to understand how this money could be put to use if it isn’t spent on this specific personal decision.There will always be other needs for your money.

You should be able to prioritise what is important, calculate how much money you could have in the future and decide how to allocate your finances accordingly.

Remember that money is your tool, it isn’t an end in itself, nor is it anyone else’s money. If marketing too easily persuades you, then money won’t stay with you for very long.

Don’t confuse good money management with the endless chase of money. If you are too focused on the money, sure you are likely to end up with a lot more of it, but you will miss out on truly living.

It’s important that you are the one that dictates your choices from a position of understanding. Take control.

By Mark Underdown

Financial Coach, Small Acorn Money

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