Some of you may recall learning how to “think critically” while you were in school. Put simply, it means to fully understand and reflect on a decision. Mastering this skill can be handy in life, especially when it comes to your banking and financial decisions. In this installment of “The Best Financial Advice I Ever Received,” Northeast Security Bank Vice President Jared Kane offers up a few tips about how to think critically about your money.
When it comes to financial decisions, it pays to slow down and ponder your options.
First off, Jared says it’s important to learn from past decisions. Hindsight is 20/20, so being able to recognize, admit and learn from a poor financial decision will make you wiser for the future.
Second, you need to be realistic about your estimates and assumptions. If you are leaning toward one direction on a financial decision or have come to a major conclusion quickly, stop and reevaluate. Quick decisions are normally not the best, Jared says.
Next, it’s important to eliminate emotion from your decision making process, says Jared. It can cloud your thinking and lead you to justify a bad decision. At the end of the day, you have to do what is best for you, your family or anyone else depending on you, not what feels good at the time.
Finally, you have to consider all the consequences of your decisions. This can seem overwhelming, but it can prevent things from coming back and biting you in the future. Ask yourself:
- What amount do I lose?
- What’s the rate of return (Return on Investment/ROI)?
- Will this tie me up financially?
- How is this decision affected by my age or point in life?
While it may not be in your nature to slow down and really think before making a decision, it can really help when it comes to understanding the full picture.
If you have any concerns or questions about a service or product Northeast Security Bank provides to you, we’ll always take the time to talk and help you understand your future financial outlook. Get in contact with us whenever you need help!