If you’re reading this blog, you probably want to make better financial choices.

In the past, you may have racked up debt, ignored your budget, spent too much money, or made some other questionable decisions related to money.  I’ve been there.

A few years ago, my husband and I were buried in $117,000 of student loan debt.  In a way, I’m thankful for this debt because it was the kick in the butt we needed to start making better financial choices.  We’re now 100% debt-free and we”re making headway on Baby Step #3.

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If you want to make better choices, it’s important to first understand why we make the decisions we make.

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Why We Do What We Do

Brooke Castillo, founder of The Life Coach School, created a model that looks like this:

Thoughts -> Feelings -> Actions -> Results

Brooke says that circumstances are neutral.  They only have meaning when we give them meaning with the thoughts that we have about them.  These thoughts create our feelings; the circumstances themselves do not drive our feelings.

This makes perfect sense if you think about it, but most of us don’t perceive life this way.  Instead, we think that our circumstances create our feelings.  If things are going great, we feel happy; conversely, if things are terrible, we feel terrible.

This is actually because of our thoughts.  If things are going really well, we may think positive thoughts, which makes us feel happy.

We make decisions based on how we think we are going to feel in the future.  For example, I might decide to buy a house because I think I’ll be happier as a homeowner than I’d be as a renter.

Of course, this isn’t actually true!

Whether or not I’ll be happy in the future has nothing to do with my external circumstances (including whether or not I own a home).  My happiness (or lack thereof) will be determined by my thoughts.

How to Make Better Choices

So, the first step to making better choices is to stop assuming that you will feel a certain way when you make a decision.  Remember that your circumstances do not dictate your emotions, your thoughts do.

Once you understand this, you can stop making decisions based on wanting to avoid a negative emotion (or wanting to experience a positive one).  Instead, you can make decisions based on facts.

Give Yourself a Deadline

The next important step is to give yourself a deadline.  We often assume that if we take longer to a make a decision, we’ll make a better decision.  That isn’t true!

It’ll take some time, sure, but there’s no need to drag it out endlessly.  When we do this, we aren’t truly making any progress.  We’re just procrastinating, indulging in “I don’t know”, and avoiding making a choice.

For the past year, I’ve been trying to decide whether or not I should have gall bladder surgery.  It’s a minimally invasive surgery, but I have a health condition that increases the risk of complications…and I’ll have to pay around $3,000 out of pocket with my current insurance.

I’ve obsessed over it and examined it from so many different angles. While that feels like I’m doing something productive, I’m not.  I’ve just been procrastinating on making a decision because of how I thought I would feel when I made that decision.

I thought I would feel nervous and anxious if I scheduled the surgery.  Ironically, that’s not true at all.  After a year of deliberating, I scheduled the surgery and I felt so much better.  I had finally taken action and I was no longer stuck in this place of “I don’t know”.  I felt relieved.

Limit Your Options

If you have 50 different options, you’re probably going to feel overwhelmed.  For example, let’s say you are purchasing a home.

Keeping an open mind is a good thing, but having too many options isn’t.  It’ll be challenging to choose between 45 different homes.  That’s just too much information to keep track of.  Find a way to limit your choices.  Look in a particular area, set a certain budget, etc.


List the pros and cons of each option.  Imagine the worst case scenario for each option and the best case scenario for each option.  Do your research.  Once you’ve hit the deadline you’ve assigned for yourself, stop.

You can obsess over a decision and overthink it to death, but that’s not useful.  Once you’ve done a sufficient amount of research, it’s time to take action.

Make a Decision

This is the part where you make the decision.  Take action and stick to it.

Do not second guess yourself.  You spent enough time considering your choice.

Accept Your Decision

Remember that there usually is no “right” decision.  You are making the best decision you can with the information you have at the time.  Maybe in the future, you’ll have new information and you’ll decide that this wasn’t the best decision for you.

That’s okay.  We can’t do everything perfectly and we cannot control everything.  It is impossible to foresee every possible outcome.

Accept that you did the best that you could and make your peace with that.

If you believe in God or a higher power, you may want to surrender control to Him.  Tell yourself that you’ve done everything you could do and now it’s in God’s hands.  I find a lot of peace in this perspective.

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