Like with any decision, some financial decisions are easy to make, such as how much to spend on a birthday present, whereas others are much more challenging, such as deciding if you will go self-employed. When it comes to making the more challenging financial decisions, we have a tendency to think that there is a definitively "right" answer and that we just need more information or knowledge. However, this can lead to paralysis and we don't end up making any decision at all.

We can also feel overwhelmed by a big financial decision and end up putting if off out of fear of making the "wrong" choice. Here are some tips which can help you make better financial decisions.

1. Break the decision down into smaller decisions

The pressure of making a large decision can be too much for a lot of people. Rather than seeing it as one decision, break it down into smaller, easier to answer decisions and tackle each one step by step. For example, if your decision is about whether you should go self-employed, break it down into a sequence of smaller questions, such as 'how do I feel about going self-employed?', 'What are the pros and cons of going self-employed?', 'Do I have cash savings to cover the quieter months?' or 'What is important to me about going self-employed?' Breaking it down like this will make the decision a lot easier and less overwhelming.

2. Get clear on your values and priorities

To make good choices with your money you need to get clear on what's truly important to you and what your values are. What is important to you in the context of money? What really matters to you? What are you saving for? What does having money mean to you? What will money allow you to do? Aligning your spending with your values and what's most important to you can help you decide what takes priority and give you that intrinsic motivation to reach your goals. When you make a decision think about how this fits in with your values and priorities.

3. Consider both the present and the future

When making a financial decision, try and balance the needs and wants of your present self with your future self. This can be difficult and many people will either focus on living for today or focus on planning for the future. To help with this, a good idea when making a big decision is to write down 2 lists of pros and cons. Write one list of the short-term pros and cons of a potential decision and one list of the long-term pros and cons of the potential decision. When making a decision, it's useful to weigh up the needs of your present self verses your future self. For example, if you are an emotional spender and tend to over-spend, weigh up whether spending now is more important than putting this money towards your future self.

4. Ask for help

There is vast amounts of information on the internet and it's sometimes difficult to know where to start and what information is reliable. This information overload can lead us to become paralysed with uncertainty and unable to make a decision. If you need expert advice then seek professional help as they will advise you on the right choice for you and your circumstances.

It can also be beneficial to talk to someone you know and trust about your decision as they can provide a different perspective on the situation and also let you talk through your options and help look at the pros and cons of the potential decision. It may also be good to talk about your money fears and what may be holding you back from making the decision. Talking your decision through with someone and getting them to sense check the decision can help you to stop getting stuck in that decision and move you forwards.

5. Set yourself a realistic decision date

To make sure you actually make a decision, you can give yourself a timeframe for when you have to make it by. Give yourself plenty of time so that you aren't making a rushed decision but don't give yourself too much time that you end up delaying the decision. It's important to also make the decision when you're relaxed and in the right mindset and not rushing around or emotional. Knowing that you have a specific time period in which to make the decision should help with the procrastination and help you feel like you are moving forwards.

If you are finding it hard to make a financial decision, break it down into a series of smaller decisions which are easier to make and talk it through with either a professional or a friend or family member who can sense check your decision and provide a different perspective. Really understand what's important to you and ask yourself whether the decision you have made is in line with your values. Ensure you are taking into account both your present self and your future self when making decisions and set yourself a timeframe around making the decision and stick to it. This should help you move forwards and make that decision that you keep putting off🙂.