How do you make financial decisions you can live with when there are conflicting needs and priorities? When you are torn between what you want to do and what you think you need to do? Many of us grew up thinking we should go to college, have a steady job, raise a happy family, save for retirement, and live a long life. How do we decide between what we think we should do and what our hearts long for?
As a financial advisor for over twenty years, I have had the privilege of witnessing many important events in my clients’ lives. And I have listened as they have regretted some of the decisions they have made.
I remember one older client who regretted not traveling as much as she wanted in her younger years because her husband did not want to travel. She did not think it was right to travel alone without him. Now that she had outlived him and many of her friends, she felt a sense of loneliness combined with deep regret.
Living With No Regrets
Feelings of regret show up in so many ways. Buyer’s remorse is one example of this. Where we doubt a purchase we just made. The elation we felt when we bought that new car is gone a few days after the deal is done, especially if it was more than we wanted to spend on a new car.
What financial decisions have you ever regretted? Investing in a stock that lost value? Buying a house that had structural defects? Lending money to a family member and not getting it back? Some financial decisions have a greater impact on our lives than others.
A friend of mine had sold her house to pay for art school and pursue her dream of becoming an artist. It was the only way she could afford it. Since then, real estate prices have skyrocketed and she has often wondered if she should not have sold her house to follow her dreams. Would she have felt regret if property prices had fallen instead of risen?
Research done at Cornell University shows that the pain of regret from not seizing an opportunity or following a dream is much greater than the disappointment we feel when we follow our dreams and they fail. Reasons people often give for not following their dreams is the lack of time or money or both.
But, maybe, it’s the fear of failure that stops us from pursuing what our heart’s deasire. Or the fear of disapproval from our communities that keeps us playing safe.
Making Decisions You Can Live With
If you are having a hard time making a financial decision, there could be other reasons behind it. Step back for a minute and ask yourself these questions:
Is the decision in line with what you value?
Sometimes it’s hard to distinguish between what we have been told to value and what we really value. Maybe we have been told to value a steady job, while our soul longs to write.
Have your values and priorities changed?
Recognize that your values change. When my kids were little, safety and security were more important to me than anything else. Now that they are grown, I value freedom and adventure. Has anything changed in your life? The need for safety and security was even more pronounced after my divorce.
Have you lost focus?
When following your ‘True North’ you must remember to stay focused. It’s hard to stay focused when you feel pulled in different directions. Go for a long walk. Find ways to stay grounded through meditation or journaling.
Are you looking too far ahead at the expense of the present?
Are you stuck in a soul-sucking job waiting for your gold-plated pension? At what cost? Your health? Time with your family?
Or are you too afraid to look to the future and live only for today?
Are you making decisions for today with no regard for your future because of FOMO (Fear of Missing Out) – other people are doing it, should I not do it too? Advertising and social media add to this sense of missing out.
What does this financial decision mean to you?
More freedom? Or maybe more security? Be clear and honest with yourself? What need are you trying to meet from this decision?
What are the consequences if you were to proceed with the decision?
Make a list of consequences you would face if you were to proceed with the decision. Who will be affected by the decision? Do you have their support? It will make a big difference if you do. Decision making is a process. Realize you are never dealing with complete information. But when you are in tune with the values of your heart, things become much clearer. It may not be easy, but it is much clearer.
Take your time but don’t overthink
When it comes to making decisions – financial or otherwise – do not be impulsive. Take your time. Sleep on it. Silence the voices outside of you. Be clear about what you need and what is important to you. Take time to consider your options, but do not overthink them. The best decisions come from the heart. Learn to get out of your mind and listen to your inner-being. It does not mean it is devoid of rational thinking. You can train your mind to synchronize with your heart.
Work with an advisor
If you are finding it challenging to navigate your finances. Or, lack confidence in making financial decisions, don't hesitate to hire a financial advisor. Ensure the advisor has a fiduciary duty to work with your best interest in mind.
Learn to be at peace with your decisions
Most decisions are not life and death decisions. And most decisions are not set in stone without the option to change course mid-stream. If you realize you made the wrong decision, then find a way to self-correct. And sometimes, you will never know if your decision was the right one or not. Don’t waste too much time looking in the rearview mirror.
The friend who chose to sell her house to pursue her dream to become an artist did become an artist. And found immense joy in her work. She also did finally learn to quieten the voices of doubt in her head. If she had to choose between her house and her art, she would pick her art.
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