How to make better financial decisions in 8 simple steps
The question of how to make better financial decisions comes up again and again in my work. Clients often come to me, afraid that they will never know how to make better financial decisions. It is common for them to feel that they have got into a pattern that has served them for many years, and therefore it will be impossible to break.
As we get older it’s tempting to think that we can’t learn new things. Think of that old saying “you can’t teach an old dog new tricks” Don’t believe a word of it!
Every single one of us has the ability to change.
We are all capable of learning new skills. Taking that first step is often the most difficult part.
I will not pretend that learning new tricks is easy. It’s not! It takes guts and it takes determination. However, with the right attitude, it’s fun!
In growing my business, I have had to learn so many new skills. From web design to writing blog posts, SEO to sales pages and marketing to mission statements, it has been a steep learning curve. I have sat by the computer, on numerous occasions, sobbing with frustration as the blooming thing wouldn’t do what I wanted it to do. (and I never cry. Well, apart from at things like DIY SOS! I blame the kids – before I had them I was normal!) Anyway, I digress.
Do I just give up when things don’t work? No. I dry my eyes, get back onto google and work out where on earth I am going wrong.
Which brings me to the first piece advice when learning how to make better financial decisions.
1 Believe in yourself!
You can learn, you can become “good” with money and using your new skills will help you to improve your life.
2 Find the gaps in your knowledge
Before you start learning how to make better financial decisions, you need to know a bit more about your current situation. What are your strengths and weaknesses in making financial decisions? You need to know which decisions you are already confident with, as well as identifying where the gaps in your knowledge are. By downloading “How to make better financial decisions”, you will get a simple financial analysis which will help you to easily identify your strengths and weaknesses.
3 What should you work on first?
Don’t expect that you will change into a financial whizzkid overnight! It will take time. Identifying the order of importance of your weaknesses, will help you to decide which ones you should tackle first. If you can set yourself small, achievable goals, then it will make your journey much smoother.
4 Improving your knowledge
Once you are clear on what you do and don’t know, you can then think about how to improve your knowledge in the poorer areas. Increasing your knowledge is the main thing that will help you to learn how to make better financial decisions. If you have a sound knowledge of that area of finance, you will then be in a position to make better decisions, and you will have confidence in the decisions that you make. “How to make better financial decisions” is packed with resources that will help you to learn new skills easily.
5 Make it a habit
Improving your knowledge of each area is easier if you can build it into your daily life, and make it become a habit. Think about times that you could easily fit in 20/30 minutes of learning. What about your commute to work? Could you use this time productively? Could you listen to a podcast as you do the ironing? Or miss DIY SOS, save the tissues and learn something new instead?
What about making a money date with yourself at the weekend? Would you enjoy sitting with a lovely coffee, on a Sunday morning, reading the finance section of a newspaper or magazine?
Finding some time to learn new financial skills will be a massive investment in your future, that will change the way you handle money today and for the rest of your life.
6 Put your skills into practice
Learning more about how to make better financial decisions is brilliant. It will help you now and forever. However, having the knowledge is only the start – you also need to put your new knowledge into action.
Start small. Think about a small financial decision that you could take and think about the impact that could have on you. Practicing with the small decisions first is a great idea. Think hard about every single purchase that you make for a whole week, right down to handing over that £2.50 for a coffee. Why are you buying it? Is it a good decision? Is it good value? How do you feel about the purchase? Does it have an impact on any other areas of your finances? Does it impact on your future financial position? Would you make the same decision again tomorrow? There are no right or wrong answers to the questions – it’s just about getting you to become aware of your thought processes as you are buying. Just stopping to think about purchases can help you to make better decisions and this will help you to gain in confidence that you are capable of learning how to make good financial decisions.
7 Moving on to bigger decisions
You can then start thinking about having the confidence to make good financial decisions on a bigger scale. eg: Rather than auto-renewing your house insurance why not take the time to compare policies? Set aside an hour specifically for that purchase and get started. Firstly start by learning as much as you can about what you should be looking for when comparing insurance policies. Then use a couple of different online comparison websites to see if you can find yourself a cheaper deal. If you are successful with this, then you will find a great sense of satisfaction and feel proud that you are able to make better money decisions.
Once you have had some success with small decisions you can then move onto bigger things that you have perhaps been putting off! Eg: Do you stick with your current energy supplier, because you are scared of changing? Learning about the switching process, asking questions if you still don’t understand, and gaining the confidence to switch could save you £200 per year!
One area where people often put off making decisions is in future planning. It seems very scary and difficult to understand, so it just gets ignored. As you develop your confidence in other areas, you will feel that you can tackle this one, confident in the knowledge that you know how to make good financial decisions.
8 Knowing who to ask
Part of learning to make better financial decisions is knowing where to ask for help. If you would like to join my Your Money Sorted Facebook group you will have a safe place to ask questions. The group is for women only and you will find a wealth of information is shared on there.
If you would like to start gaining in confidence in making good financial decisions, then this FREE download will help you to quickly and easily identify your strengths and weaknesses. It is also packed full of information to help you to learn how to improve your knowledge. The impact of learning how to make better financial decisions will be absolutely invaluable to you today and every day.
I hope that you enjoy the immense feeling of satisfaction that comes from taking control of your situation and changing your life for the better.
I am Eileen Adamson, Your Money, Sorted coach, working online with UK based women. I can help you to develop a better relationship with money and feel calm, relaxed and positive about money. This will allow you to feel confident, in control and able to make good financial decisions. Through creating a good relationship with money you can then live the life that YOU want to lead.