It is not always a hot topic but financial indecisions is also a cause for concern when you start to talk about personal finances. As much as debt payments, saving for the future, and even budgeting your money is important, these can be very much affected when you have indecisions regarding your finances.
What is money indecision?
There are financial decisions you need to make at the start of the year. Making the right ones will help push you closer to your goals. However, there are times when you cannot move forward with any type of decisions.
Afraid to make a wrong decision
One of the reasons why you have financial indecisions is that you are afraid to make a mistake. You do not want to suffer the consequences and put off making a decision. This usually happens when the stakes are really high. You are paralyzed not knowing what to do and how to decide. This is the time when fear has set in and taken control over your finances.
Can’t decide because of too many options to choose
There are times when you cannot make a decision because you are faced with too many options. There is even a chance that some of the options you are looking into are financial myths that will do more harm than good. Having too many choices can also cripple you and prevent you from making any decent money decisions.
Why does it damage finances
Now that you have an idea what financial indecisions are, you might be wondering why it affects your finances so much. Here are a few of the situations which can happen when you fail to make money decisions.
You can lose potential earnings
Gallup shares that there has been a 38% drop in younger consumers who invest in stocks. This is a significant decrease in people who are losing out on a passive income opportunity. Of course, there are a lot of reasons why people choose not to invest in stocks. Some just don’t understand it well while others are afraid they will lose their money.
There is a saying in sports that reminds people that they miss 100% of the shows that they do take. The same can be said with personal finance. If you do not take risks in trying to improve your financial situation, you miss the opportunity to earn more. This can help you reach your dreams faster or even give you the chance to retire at a young age.
Financial indecisions can hinder you from taking risks. It does not mean that you will abandon all logic and invest as much as you want. There are risk profiles when investing and you need to find yours. The general idea is that you can invest a bigger amount while you are young because in the event that things go south, you can still earn it back.
You pay interest and other fees for late payments
When it takes you a long time to decide on matters that concern your finances, you might be losing money on interest payment as well as other fees. This is because you may not realize it but you could already be missing important due dates when making a payment. You were too preoccupied trying to make a decision that your due date has already lapsed.
This might not be a regular occurrence but taking a long time to decide can hurt your finances. While you are trying to decide which credit card to pay first or if you will put more into your house payments or car payments, due dates have already lapsed. You end up paying more the succeeding month hurting your finances even more.
How to correct it
As you now have an idea what financial indecisions are and how it can wreak havoc on your budget and overall finances, the next thing you need to do is correct it. Here are a few things you can do to address this problem.
Start making small decisions
One of the reasons why you are afraid to make financial decisions is that there could have been someone who used to make that for you. It can be your parents when you were still living at home, your partner when you were in college, or even your husband or wife when you got married. You have been used to just going with whatever one person said or suggested.
You need to be able to make decisions on your own but you do not have to make big ones right away. Start with small ones and slowly build your way up to bigger ones. Like in running, you do not sign up for a full marathon when you are just starting to run. Conquer small distances first and slowly build up to the bigger races. The same can be said with making money decisions.
Another thing this helps you do is to create that habit of making a decision. Financial indecisions cripple you financially and if you create a habit of deciding on money matters, you will move forward. There will be times when you make the wrong choices but that is expected because you are human. The best thing to do is to learn from them and use the experience to make better decisions down the line.
Always make informed decisions
A lot of high-level executives make big company decisions day in and day out. One thing you might not see is that they are able to do these because they have all pertinent information on-hand. They make informed business decisions. When they choose to make business investments, they look at a lot of timely data to help them make the most logical choice.
You need to do the same thing with your finances. If you are going to make a financial decision, you need to do so with the right details on hand. If you are going to buy a house, you need to look at a lot of factors more than what it looks like. You need to consider your budget if you can afford the monthly payments. You also need to look at maintenance costs as well as taxes and insurance. Financial indecisions can be addressed if you have all the information you need to move forward.
Accept the fact that you will make mistakes
As mentioned earlier, you will make mistakes simply because you are not perfect. However, you should not be afraid of making mistakes. These are great learning opportunities for you to be a better version of yourself. All those money experts you have heard about have made mistakes in their life. The difference is that they use those as stepping stones to help them make better decisions next time around.
Financial indecisions can hinder you from growing as a person. If you cannot make money decisions, you will miss a lot of things in life. You will not be brave enough to make investments, you will shy away from learning opportunities and simply run away from making mistakes in life. Not only will this stop you from growing financially but as a person as well. The good thing is that there are a lot of ways to address this concern and be able to move forward in reaching your goals in life.