6 Questions I Always Ask Myself Before Making A Personal Finance Decision – The Motley Fool

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It’s good to have a little talk with yourself before shelling out money for anything other than necessities.

Key points

  • There’s no such thing as “spontaneous spending.” We each have at least a moment to consider what we’re doing.
  • We are each in charge of protecting our own financial interests.

My husband had a nice laugh this morning when I told him that I sometimes find myself planning for an earthquake. We live in Missouri. It’s not as though it can’t happen or hasn’t happened before. It’s just not something everyone I know spends time thinking about.

I’m not trying to convince you to add an earthquake rider to your homeowners insurance policy (although it might be a good idea). I’m telling you because it’s only fair you know that I tend to plan for the worst. I’m not a pessimist precisely, but I do like to get my ducks in a row in case everything goes south.

It’s how I approach life, and it’s how I make personal finance decisions. My habit of overthinking things may be one of my least attractive characteristics, but it has come in handy more often than I can count.

It all begins with an internal dialogue, questions I ask myself before making a personal finance decision. Here are my top six questions:

1. Do I understand what I’m signing up for?

I cringe every time I think back on all the contracts I’ve signed without reading the fine print. Fees can eat us alive if we’re not careful, and buried in the fine print is where you’ll find the true cost of a loan.

But it’s not just loans. If you invest in your company’s 401k, an IRA, or any other kind of investment, you pay brokerage fees. Do you know how much you’re paying? I know that I didn’t even bother to check in our early days of investing. I figured one broker was pretty much like another. I was wrong. The higher the fees, the less money you get to keep.

Today, I’m that annoying person who makes sure I know what I’m signing up for before committing to anything. That includes reading a contract through and asking questions before I sign.

2. Why do I want this?

Motivation is a big deal when it comes to money. I have gotten in the habit of …….

Source: https://www.fool.com/the-ascent/personal-finance/articles/6-questions-i-always-ask-myself-before-making-a-personal-finance-decision/

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