Make time for life’s big decisions
In the current climate, there is uncertainty in all of our lives with both health and financial concerns. However, while we are all understandably focusing on the here and now, it might be worth using this time to take a step back and review your long-term financial wellbeing as well.
A recent study1 suggests many people don’t have sufficient mental space to make the right choices when it comes to tackling life’s difficult decisions. The good news, however, is that minor changes to the way people approach decision-making can dramatically improve their ability to make better financial choices.
Avoiding difficult decisions
The research found that the great British public typically ‘don’t do difficult decisions’. For instance, over four million said they don’t have the mental space to tackle difficult issues, while a further 6.4 million don’t have time for important life admin. Many Brits also admitted to putting little effort into key decisions: while over half said they always ensure an optimum choice of holiday destination, less than one in three adopt such a thorough approach to pension arrangements.
This tendency to ‘sweat the small stuff’ appears to be impacting people’s financial decision-making abilities. For example, over half of respondents said they haven’t made a decision on whether to buy critical illness cover, while just under half haven’t considered changing their pension arrangements. In addition, when financial decisions are being made, many don’t give it their full attention, with over four in 10 sorting out finances while sat on the sofa and one in 10 doing so at work.
Tips to aid decision-making
Small behavioural changes, however, can have a big impact on people’s ability to tackle difficult decisions. For instance, picking a quiet location free from distractions and a time when you can focus fully on an issue will help, as will avoiding making decisions after a tough day. Visualising the future and linking financial decisions to life ambitions can also be beneficial.
We’re here to help
Don’t forget we’re always here to help you with life’s difficult financial decisions. So, get in touch and we’ll guide you through the decision-making process. With our assistance you might even find that making better financial decisions isn’t actually too difficult or time consuming.
1Scottish Widows, 2019
The value of investments can go down as well as up and you may not get back the full amount you invested. The past is not a guide to future performance and past performance may not necessarily be repeated.