How do I make the right financial decisions?

How do I make the right financial decisions?

Every day you are called upon to make several decisions. From simple things, such as what you will wear to school, to how you will organize your reading so that you can prepare properly for the next day’s exam. But what about the decisions you have to make to manage your pocket money?

You may be thinking that making financial decisions is something that concerns the “grown-ups”, but what will you choose if you find yourself faced with the dilemma “I buy a new bike or “I raise money for the 5-day school trip”? So, let’s look at some parameters that you should keep in mind when it comes to making decisions about your finances.

The amount you have to spend is very important. As the amount increases, the more the responsibility for the decision increases and the time it takes to think about whether what you want covers an important need of yours or is just an impulsive desire of yours. As you understand, it is one thing to want to buy a t-shirt worth 15 euros and another is an electric skateboard that costs 415 euros. 

Another important factor that you should take into account is your emotional state the moment you make the decision to use your money. It is true that when we are in a state of euphoria, we tend to spend more and with recklessness. Whereas when we are calm, our thinking is clearer and our critical ability more unaffected.

Finally, an important factor is the time period when you are called upon to make a financial decision. For example, at Christmas, your priority may be to buy a gift for your family and not to save for your summer holidays. However, it is worth considering that the second case will definitely compensate you in the future.

Remember that skills in making financial decisions are constantly cultivated. The more conscious you are in your choices and the more you think in a more global way, the more your critical ability will improve. The right choices will lead you to better manage your finances, as well as other resources, such as your time.