How do you make better money decisions
June 24, 2020
Whether it’s selecting from fifteen ways to invest a lump sum of cash to choosing the right home loan or car make and model, how do you know if you’re making the right money management decisions in the era of endless choice.
Whether it’s selecting from fifteen ways to invest a lump sum of cash to choosing the right home loan or car make and model, how do you know if you’re making the right money management decisions in the era of endless choice.
1: Take it slow
Ditch impulse in favour of rationality. Remember the saying “his money was burning a hole in his pocket”? Don’t be so keen to make a rash decision. And always obey the HALT principle (useful for any kind of decision-making process):
Never make a decision when you’re Hungry (and this isn’t just physical hunger, it can also apply to being hungry for another’s affirmation), Angry, Lonely or Tired. And if you’re still in doubt, try the stranger principle for any purchases.
2: Do your research and shop around
If you’re speaking with an adviser, always check how they benefit or not from you making a decision in favour of their product or service. If they do stand to benefit, don’t be afraid to ask for details of their track record (ie. Do your homework!).
Use websites such as Canstar to compare offers and deals on financial products such as car or house insurance. And always, always do your ‘due diligence’ before purchasing a big-ticket item such as a car or property. Similarly, even if you’re looking to get something smaller such as ducted heating for your new property, or buy a gym membership or a pair of shoes, we have the benefit of online user reviews and comparative prices at the click of a mouse: use it to your advantage and check the fine print.
3: Delay it
Delayed gratification isn’t glamorous, but it’s the best way to financial and physical health! If you’re feeling the urge to buy something way out of your budget, or slap something on your credit card – take a walk. Leave it for a day and consider whether or not it fits with your long-term goals and whether or not you actually need the item. Chances are, the urge will pass.
4: Keep a spending diary
The best way to make good money management decisions is to know how much you’re spending and on what. Try our budget planner to find out how much you may need to cover your weekly, fortnightly, monthly, quarterly or annual costs. Creating a budget is a great way to keep track of where your money is going.You can assess your spending ‘leaks’ and where your spending is coming from impulse and whimsy, and even what drove you to buy something you couldn’t afford. Knowledge is power, so by understanding the reasons behind your decisions, you can make better ones in the future.
Need more tips?
We’ve listed 18 tips on making your dollar go further in our frugality article. We’d also love to hear your money saving tips. Tell us on Facebook and we’ll be sure to share your pearls of wisdom with everyone.
Want more help?
Want some extra help on your budget? TelstraSuper Financial Planning Advisers can offer expert guidance on a range of topics to help secure your financial future. You can speak to an Adviser from TelstraSuper Financial Planning by calling 1300 033 166 or fill in our online contact form. There's no additional cost for phone based advice about your TelstraSuper account as this is included in your membership.