40: Making those tough decisions

Today we dive into the challenges of making big financial decisions. We chat about how to  navigate through an overwhelming process by considering factors like financial stability, family obligations, goals, risk tolerance, and work-life balance.

We also touch on how to recover from making the wrong decisions, (you know we have all been there) and strategies to avoid decision fatigue. 

So, jump in and get ready to make informed decisions for your financial goals!

Strategies discussed:

• Achieving a healthy work-life balance 
• Seeking  guidance from mentors and experts 
• Aligning your decisions align with your personal values and priorities 
• Continuously educating yourself  to improve your decision-making skills
• Tackling decision fatigue. 

Proactive decision-making contributes to financial stability, personal fulfillment. And most importantly, the achievement of your long-term goals. 

Let us know if this episode has helped to  remove the stress  and build confidence when making those tough choices!

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Transcript

40: Making those tough decisions

[00:00:00] Carolyn: Hello everyone. My name is Carolyn. Welcome to the saving for your first home podcast. I am the CEO of the financial moment. We offer money coaching for those who are ready and willing to make financial changes in their lives. For the most of us, there comes a point in time where we think to ourselves, it will be really nice to own property, but it sometimes can feel like a pipe dream, and not very easily obtainable. So I created this podcast to give you all the information and tools you need to take the steps forward toward home ownership. Take it from me, my husband and I started our lives together, working part-time jobs with a young child, fast forward through many hiccups and failures. We stepped our feet into our very first home. 

[00:00:45] For us it was a pile of dirt, but eventually our family home was built on that dirt. Now we are in the midst of growing our investment property portfolio. I created the savings for your first home podcast to give you easy, [00:01:00] actionable tools for you to do the same. If you have that same gut feeling that I did and want to create a life for yourself and your growing family, but don't know where to start.

[00:01:10] You are in the right place. Let's do this. 

[00:01:13] Welcome back to The Saving for Your First Home podcast. I'm Carolyn, you're Money coach. Last week we talked about how things can sometimes feel overwhelming, and then you're just not feeling like accomplishing anything or sticking to your goals. Well, this week I was thinking to myself, you know, a lot of the problem sometimes is in the decision making itself.

[00:01:39] Do you have a friend who is always so good at making decisions? You know, they can weigh the pros and the cons. They can instantaneously make a decision whether or not they're going to eat healthy or not. Or if it's a bigger decision, they, you know, know how to ask the right questions. But, For the most [00:02:00] part, people have a hard time making decisions, and when it comes to our finances, there are a lot of big ones that we have to make.

[00:02:10] So with buying a home, there are so many decisions that go into that. You're talking affordability, you're talking how it's gonna impact you personally, financially, is it gonna change your lifestyle? Are you gonna have to commute? There are so many, decisions that go into purchasing a home that by the time all is said and done and you have your keys, you're totally exhausted.

[00:02:35] But that's not the only big major life financial decision that you have to make. There are retirement planning, there's education planning for your. Kids, there's whether or not you need certain types of insurance coverage throughout your different stages of life. And then there's career choices. Now, career choices we haven't talked about on the podcast yet, and it directly impacts [00:03:00] your income and you would think it is super straightforward, you know, more money.

[00:03:05] What's the, what's the big decision that needs to be made? But there's a lot more factors that go into making a career choice. Now, in my case, I find that there's always seems to be these windows. So what I mean by that is like windows of opportunity and when they're open, you can either choose to walk through it or you miss that window and that opportunity doesn't come around again.

[00:03:34] So when it came to my career, I was working for a healthcare institution and I was doing more application type work. So I was still in finance, but doing more of the software implementations. Now, my brother worked in it and he would always tell me, Carolyn, you need to. Go into the private sector and work in it [00:04:00] and do implementations there.

[00:04:01] You know, you can make so much more money than working for a healthcare institution. And I was just like, yeah, maybe. But then you have young children. And you wanna buy a home, and there's so many other factors that go into whether or not you wanna actually change jobs. So stability at the time was very important.

[00:04:23] So I decided, no, I don't wanna leave my current employer. I wanted things to be stable so that I could help to build a future for my family. Another factor was work-life balance. Would a new job demand more of me when I had young children? So I had to really think about that more income potential versus work-life balance.

[00:04:47] Next thing, I had to evaluate my opportunities for growth. Now, I'm pretty sure that if I moved over to the IT world that I would've had a lot more opportunity for [00:05:00] growth in the finance sector. People tend to stay around for a while, and so there isn't as much opportunity to move or grow. So again, another factor that I had to consider before making these types of career choices.

[00:05:15] So in the end, just to let you guys know, I did stay and worked in finance again for over 25 years, and I learned so much. And now I'm able to share my knowledge with all of you. So I think it was well worth it, me staying in the current role that I was in so that I could eventually give back and help others reach their financial goals.

[00:05:40] So is there a process that we can utilize when we have these major financial decisions to make? Let's go through eight different factors that can play a role in making a decision. So the first one would be whether or not you're financially stable. [00:06:00] Now, this is where you consider your current income level, your job security, and any financial obligations you may have.

[00:06:07] The second factor would be considering your family and any dependence that you have, you have to factor in the financial needs of your family members and your dependents, because that's going to have a direct impact on your decision. If we're talking about purchasing a home and you have in-laws that normally live with you, or they are planning to live with you as they get older, then this has to be a factor in your decision making when you are going to purchase a home.

[00:06:39] So you need to consider those things as well. And of course, the next thing is to consider your goals. What are your short-term goals and what are your long-term goals? Right? Evaluate what your immediate needs are versus your long-term aspirations. One of the things that I teach my clients is to take a look at what's happening now and [00:07:00] where's your money going, and does it align with what your long-term goals are. So for example, if their money is a little bit short and they're not able to reach their goal in a specific amount of time, then it may mean that they need to earn more income or reduce their spending. So an action needs to be taken in order for you to actually reach your long-term goal.

[00:07:26] This is why I say consider your short-term and your long-term goals, because when you're making a decision, You wanna make sure that it aligns with the goals that you have. And then the next thing would be your risk tolerance. This is where you're going to assess your comfort levels with taking risks and what the potential reward would be.

[00:07:46] So in my case, I was a little bit shy about taking that risk because I considered my family, I considered our long-term goals, and I thought, hmm, making that move to a new organization, a new environment, [00:08:00] may just be too much risk. We talked about work-life balance, so again, this is a nice balance between your personal and your professional commitments, and you want those to be in sync as well.

[00:08:13] The next step is your support network. You wanna seek guidance from people that you trust and your mentors and a money coach, but really it's people that have walked the path before you and you can seek advice and guidance from them. You know, it's funny because I've heard the saying before that if you hang around with smart people, then you start to make smart decisions.

[00:08:37] And it's really true because people that are perhaps educated in a particular field know a lot about that particular subject. So if you have to make a decision, wouldn't you just go to the person that knows everything about that? It's, it's just kind of common sense, but people forget about that sometimes we ask the wrong individuals for advice when [00:09:00] they know nothing about the thing that you're trying to make a decision on.

[00:09:03] So it's important to seek advice from people that you trust and that are mentors to you. The next step is your personal values and your priorities. So this is a little different than your goals because your personal values dictate who you are and your priorities are based upon those values. So when you make a decision and it goes against your values and priorities, you automatically feel uncomfortable.

[00:09:34] And so, That is why we take these things into consideration. So let's say we're considering a neighborhood to live in now, perhaps a certain neighborhood doesn't fit exactly your values and the priorities that you have. So in the city of Toronto, it's very evident that when you have a good school, the housing prices are extremely high in that neighborhood.

[00:09:59] That is [00:10:00] because the personal values of the people that live in that neighborhood. A high value on their children's education, and so they're willing to pay more for that home because they know that their children are going to go to a good school. And then finally, knowledge and information. You constantly want to be educating yourself.

[00:10:20] Now, I know I am already speaking to the converter because if you're listening to this podcast, it means you're trying to soak up as much knowledge as possible. But we all know that we sometimes can make the wrong decision. And what do we do then? You know, sometimes there's consequences, sometimes not, but the wrong decision always kind of feels wrong inside your gut, and sometimes it's paralyzing because you don't really know what to do after that has happened.

[00:10:50] So I thought I'd give you a couple tips on how to pivot when you've made a wrong decision. 

[00:10:57] If you're anything like I was staying on top of your [00:11:00] budget is not an easy task. Paycheck to paycheck would go by and you're no further ahead. For my listeners, I am giving you this free guide that is going to take you to the next level. It's got 10 easy tips to follow. To help you stay on track with your budget, just head to the financial moment.com/budget dash.

[00:11:26] Enter your information and you can download this guide right now. 

[00:11:30] Carolyn: So one thing I would do is to assess the situation and identify the lessons learned, right? Because , nobody's perfect. Everybody's going to make a mistake. But if you can learn from that mistake, then you're better off the next time round.

[00:11:46] So identifying what. Went wrong, and then learning from that is half the battle. Then the next idea would be to actually explore some of the alternatives, right? So if you made a bad [00:12:00]decision, had I made a different decision, what would have been the outcome in that scenario. So if you kind of look at the bigger picture and explore.

[00:12:09] What your alternatives are, then it's gonna be much easier the next time you have to make a decision. So let's take an example. What about if you made an investment and you thought about all the reasons and you made this investment and you thought, you know, this is gonna be good for my family.

[00:12:27] And you end up losing money on that investment because nothing is 100% guaranteed in life and it's gonna happen. So what do you do? Assess the situation. You identify lessons learned. Perhaps you pivoted too quickly. Maybe you didn't do enough research. You revisit your goals. You make sure that investment actually aligns for what you want to achieve.

[00:12:52] So if it's a retirement that you're looking for to fund, then perhaps a short-term investment wouldn't have been the right [00:13:00] choice. And then I would seek out some advice and expertise, right? You want to talk to the people that know about the investing that you're doing, so a financial advisor, your bank other investment companies, they can do an assessment for you and actually put you in a better position to make wiser choices.

[00:13:21] They can actually create you an action plan. And this way you are not gonna never lose money, but you may be on a path that's going to grow your investment over the long haul. So we've explored the factors to consider when making a major financial decision. We've actually explored what could happen if you make the wrong decision and how to pivot. 

[00:13:46] So what about decision fatigue? Have you heard that term before? This term refers to the mental exhaustion and the reduced ability to make effective decisions over an extended period of [00:14:00] time. So I don't know if both you, but sometimes after a long day of work where it's been very busy and you've had to make a lot of mental decisions, You're just exhausted at the end of the day, and then your kids come and ask you that one question that will send you over the edge what is for dinner, and I don't know what it is about that statement, but after a really long day, you have no idea.

[00:14:34] And sometimes, you may not have the best response and you know, if you haven't planned and made something perhaps ahead of time, that one decision can just break you. So decision fatigue can actually have some consequences. It can make you avoid things. It can make you have decision overload and make you feel overwhelmed.

[00:14:57] It can actually make you impulsive. [00:15:00] So you don't even really think about it. You just make a quick rash decision. And then it can also reduce your willpower, right? So if you are trying to stick to a budget or resist temptations by making choices when it comes to spending. That willpower will be much lower if you're just totally exhausted and have decision fatigue.

[00:15:21] So how do we mitigate that? How do we have some strategies that can help us when we're feeling this way? The first thing would be to prioritize. You need to prioritize and put your focus and energy on the most important tasks. I did that the other day. I was putting this one particular task that I needed to do off for the long time, and it was actually overdue.

[00:15:47] And at the end of the day, I committed to myself that tomorrow morning I would work on it first thing before I read any emails, before I did anything. And before you knew it, my mind was clear. I was [00:16:00] able to breeze through the task like it was nothing. And I went back and looked at my emails.

[00:16:06] Cause that's normally how I start my day. And I'm like, I'm so glad I didn't do that first, because I would've been sucked into this whirlwind. Responding to problems and, you know, all sorts of things. I would've been so exhausted by that I would've never gotten to the hard task that I needed to complete.

[00:16:25] So, I can honestly vouch that this is a great way to kind of mitigate that decision fatigue. Then. I would say to take a break, right? So throughout the day, give yourself a break. Get up from your desk. Or if you have a physical job, maybe you need to sit down and just take a break. Take a minute to reset.

[00:16:48] Get some fresh air, stand up and walk around. Take a break by sitting and reading something pleasurable. Just give your mind a chance to relax, and you're [00:17:00] gonna feel so much better when you go back to all of the decision making that you need to do and then establish some routines. So sometimes you have to make decisions and you really don't need to.

[00:17:11] If you develop a routine and you just do it without thinking. Like packing lunches. You know, I remember when my children were younger and I used to dread packing lunches. It's always like, what do I put in here that these kids are going to eat? Well, if you establish a routine maybe with your kids, maybe they're can help you with the shopping, maybe they can make a an actual menu for you.

[00:17:34] It become so much easier, and maybe it's a pleasurable task. Well, I don't know. Maybe I'm pushing it a little bit, but you can make it so that it's not such a, a chore and a difficult decision. And then finally prioritize some self-care, right? The sleep, the exercise, stress management, all those things really play a factor into our mental resilience and the ability to make good decisions.

[00:17:59] [00:18:00] So these are kind of the ways that I would incorporate in your life so that you can mitigate that decision fatigue. So when it comes time to making the real decisions, you're fresh, alert and ready to tackle your financial goals. 

[00:18:15] Decision making is really a continuous process that has no ending, but using those various factors to help make that decision is going to make it easier for you, and also to be mindful of what those financial decisions are and how your everyday choices can lead to improved financial wellbeing.

[00:18:38] And then finally, use the strategies to. Mitigate your decision fatigue and that will enhance your decision making ability. So I hope this has helped. Sometimes we all just get a little bit tired of making decisions, and so having these strategies kind of in the back of your mind may help you.[00:19:00]

[00:19:00] And if you're new to the podcast and new to me, Carolyn, as a money coach. My company is called The Financial Moment, and I named it that because financial moments happen every single day. And a lot of the time, if we're not prepared, then we allow money to make the choice for us. And so my goal is to ensure that you have all the tools and resources without letting money drive that decision.

[00:19:31] So if this is you and you struggle with making those financial choices, then you should consider our new group coaching program. It's called MORE and it runs for four weeks with live training sessions. Q and a discussions. It comes with a few different tools that I give you, and we're gonna run it in a group format with the ability to help one another move [00:20:00] forward and build more into our lives.

[00:20:02] So if you're interested, just send me a message on Instagram saying, I want more or you can send me an email and I will give you all the details about this program. It starts on May 30th and it runs for four weeks. So I hope to see you there and have a great week. Take care. 

[00:20:22] Thank you for listening. We are committed to helping you place your very first steps into your new home. See you next time.