Ever had a really important money decision to make? We all have. I can tell you many stories about how I’ve done it the wrong way. Our brain is wired to remember negative experiences more vividly than the positive. But I would submit for your consideration the powerful encouragement that goes forth when you share positive testimonies. There’s no fancy theory or diagram to break down, just a simple 4 step process my wife and I follow when we’re faced with making an important financial decision.
Step 1: Go to God in prayer
Retirement. Home repairs. The kids college. I know. It’s a lot. While we have the capacity to make great decisions, our track record hasn’t been very good with juggling several life impacting elements under stress. Proverbs 3:5-6 does a great job showing us who we should be placing our trust in when faced with tough choices. “Trust in the Lord with all your heart, and do not lean on your own understanding. In all your ways acknowledge him, and he will make straight your paths.”
Step 2: Talk with your spouse
Always come together with your spouse to make financial decisions for the family. Doing so creates agreement by getting on the same page. It also allows for multiple ideas and perspectives to be discussed. Two minds are better than one, especially when complexity is involved.
Step 3: Think endgame
No, unfortunately we’re not talking about Avengers: Endgame. What’s the best financial decision to make for your future? Think LONG term. Remember, short term pain (delaying your desires today) produces long term gain (multiplying your desires tomorrow), and short term gain (instant gratification) produces long term pain (continuous financial anxiety). Stephen Covey emphasized strategic planning at its best with the second of his 7 Habits of Highly Effective People, “Begin with the end in mind.”
Step 4: What’s the principle of the matter?
All of us have an inner child in us that’s wants to spend money frivolously. Child’s play can’t be the lens we view our money through. Make decisions based on principle, not preference. A preference is selfish and singular in impact, but principles are selfless and universal in significance. My wife and I have four family core values: Stewardship, Integrity, Leadership, and Kaizen (S.I.L.K.). We use these values as a guide. Does the purchase demonstrate good stewardship (Ex. only buy if we can afford it)? Does a purchase violate our integrity (Ex. company makes a questionable product)? Does the purchase help others and set an example (Ex. larger car provides extra cabin space for children and peers)? Does the purchase help improve our family (Ex. education, professional development)?
My wife and I stay grounded financially by leaning on God, each other, and having a value system. What’s your process for making important money decisions? If you don’t have one, what are you going to do differently to start making wise choices? Oorah!