Skip to site content
The Show

Questions to Ask Yourself Before Making Major Financial Decisions

Ever wonder why certain people are more financially successful than others? Does it have something to do with their economic status their born into? IQ? Genetics? Behaviors? Or a combination of certain factors?

Well, as it turns out, research consistently reveals since as early as the last 1800s, that the vast majority of millionaires don’t come from millions. Research also debunks the notion that IQ or genetics is an overriding factor in financial success. What the research does find again and again is that self-control and discipline behaviors are correlated with success.

This is good news! This means that financial success is well-within your control. And the money decisions you make now can have a big and small impact on your overall financial situation. From minor purchases like clothing and household items to major purchases like a car or home, knowing the questions to ask yourself before pulling the trigger can help you make the best financial choices for you and your family.

Join us for this week’s installment of The Money Guy Show as we reveal the 8 behavioral finance questions every individual and couple should ask before making major financial decisions.

The 8 Behavioral Finance Questions To Ask Before Making Major Financial Decisions:

1. Is it a want or a need?

If you need it, make sure it’s the best option. If you want it, what is motivating your purchasing decision? Understand the fundamental natural of your purchase and then strive to factor in the true cost of that purchase – what you have to give up in order to attain it. Making sure you’re not giving up too much or compromising your future needs are important considerations before making a major financial decision. Deferring gratification is a disciplined approach to affording what you want and need without negatively impacting your financial success.

2. What is the lifespan of this decision?

In other words, is this a small, medium, or large purchase? Understanding how a financial decision today will impact you and your financial situation in the short and long-term can’t be ignored.

3. Does this purchase delay or accelerate my financial goals?

Think about whether or not a major financial purchase moves you closer to reaching your financial goals or delays you. Looking at your financial decisions with a big picture perspective can help you prioritize which purchases you make and when you make them. If a purchase does not align with your financial goals and, instead, significantly derails your progress toward achieving it, then is it really the right financial decision?

4. Have I conquered my budget and am I living within my means?

Before you make major financial decisions, do you have fundamental money management practices down? Meaning, have you made a plan for your army of dollar bills so that you effectively fund what is important to you without spending in excess of what you have?

5. Have I educated myself enough on this purchase or investment?

Did you do your homework? Don’t make impulsive financial decisions. Time and research allows you to understand your purchases and their impact on your finances.

6. Who or what is influencing this decision?

Consider what or who is influencing your financial decisions. Making major financial decisions based on the perception of others can be disastrous. Trying to keep up with the Joneses hardly yields financial successful outcomes. But, if you have a financial advisor who is helping to counsel you through a large purchasing decision, you are likely to feel more assured that you’re making a smart financial choice that considers all the factors.

7. If something happened, would my family be OK?

If you make this financial purchase, and something happened, would you still be able to provide for your family? If the answer is, “no” then you should re-evaluate your finances and take steps to ensure that they would be. Having sufficient insurance coverage and estate planning affairs in order protects you and your loved ones.

8. How do I make sure my kids won’t fail financially?

Are you modeling behaviors that lead to financial success? And are you taking advantage of planning opportunities to set your children up for financial success and then able to maintain it on their own?

At the end of the day, if your financial decisions align with your priorities and long-term vision for your life, which provides a good guide for your financial choices that motivates wise financial behaviors.

Resources Mentioned in this Episode & Related Episodes

Enjoy the Show?

Where You Can Watch and Listen:

Subscribe on these platforms or wherever you listen to podcasts for new episodes every Friday, live streams every Tuesday at 10am CT, and new highlight clips throughout the week.

Related Content

Free Resources

Financial Order of Operations®: Maximize Your Army of Dollar Bills!

Here are the 9 steps you’ve been waiting for Building wealth is simple when you know what to do and…

View Resource

Wealth Multiplier By Age

How much to save every month to become a millionaire.

View Resource

How Much Should You Save?

How much of your income can you replace in retirement? You can replace different portions of your income in retirement…

View Resource

Articles

I Have a Lot of Money, but I Don’t Feel Wealthy!

, ,

Read More

Where Should You Invest? (A Beginner’s Guide to Investing in 2024)

, ,

Read More

What Is The Best Way To Buy A Home In An Expensive State?

, ,

Read More

Financial FAQs

Courses & Tools

How about more sense and more money?

Check for blindspots and shift into the financial fast-lane. Join a community of like minded Financial Mutants as we accelerate our wealth building process and have fun while doing it.

https://moneyguy.com/wp-content/uploads/2023/10/accent-icon-book.png

Millionaire Mission (Brian’s Book)

Buy Now
https://moneyguy.com/wp-content/uploads/2023/10/accent-icon-math.png

Know Your Number Course

Buy Now
https://moneyguy.com/wp-content/uploads/2023/10/accent-icon-pencil.png

The Money Guy Net Worth Tool

Buy Now

Recent Episodes

It's like finding some change in the couch cushions.

Watch or listen every week to learn and apply financial strategies to grow your wealth and live your best life.

LIVE ASK WifeWorkLonger

Should I Make My Wife Work Longer?

Watch Now
FULL HowToBecomeAMillionaire B

How to Become a Millionaire By Age (2024 Edition)

Watch Now
Laid off

I Just Got Laid Off! What Now?

Watch Now