The Best Decision Doesn’t Always Make The Most Financial Sense

Want to get more out of decision doesn always make without the guesswork? Below we walk through the essentials in plain language, with practical steps you can use right away.

Key Takeaways

• In fact, sometimes, it defies financial logic.
• Worth noting: pay the minimum payments on all of your debts except the smallest which you pay added on - whatever you can manage.
• When the smallest debt is paid off you roll the amount you were paying on that one into your next largest debt.
• Wash, rinse, repeat - until all your debts are paid.

Is Decision Doesn Always Make Worth It?

SharePin3Tweet18Share223 SharesOne aspect that I’ve come to realize over the years is that getting your finances together and winning financially doesn’t consistently make sense. There are plenty of reasons why this is the case,  but for me the most convincing one is that we as humans aren’t perfect logical machines.  Just since something is logical doesn’t mean that we’ll follow through with it.  We frequently require assist along the method, a psychological boost if you will.

Example - The Debt Snowball One of the best examples of this is Dave Ramsey’s debt snowball.  The debt snowball by all accounts is not the most financially sound method to get out of debt.  It says that you should: List your debts from smallest to largest. The reason why Ramsey doesn’t suggest this method, though, is since it doesn’t take into account the human element.   He says that debt elimination is about 80% behavior modification and about 20% head knowledge.

Where the Real Savings Hide

More importantly, you can have all the excellent debt reduction plans in the world, but if it doesn’t take into account human psychology it just isn’t going to work as frequently. The debt snowball realizes that for a plan to be workable it has to assist modify behavior to get you moving in the right direction.

It does that by giving quick wins when smaller debts are paid off, giving you the psychological boost that is needed to keep moving towards the goal. The other method, while it may save you some money, frequently does not work as well since you’re not as motivated by the quick wins - and you end up not working as hard towards the goal.

A Closer Look at Decision Doesn Always Make

Remember that another Example - Emergency Funds Another example of a financial decision that doesn’t necessarily make the best financial sense could be the decision to fund an emergency fund. A couple of years ago we were in the middle of re-funding our 6 month emergency fund.  It had recently been depleted and we wanted to build it back up in case of a layoff or other emergency.

Since she knows I’m taking her feelings and well being  into account, she’s more likely to be on board with our other long term goals now as well. Careful Decisions Will Lead To Success What I’ve learned through this process is that to succeed financially you have to be willing to make careful decisions about where you’re headed, and realize that success doesn’t consistently mean making the most logical choice.

What to Know About Decision Doesn Always Make

As a rule, sometimes it means taking into account the psychology and human elements of the equation.  Only when you do that will you truly be able to make the best decisions for you and your family. Have you encountered a situation recently where you made a decision that you felt was the best, even if it wasn’t the best financially?  Tell us about it in the comments!

Should You Consistently Do What Makes The Most Financial Sense?Should you consistently do what make the most financial sense according the calculator? Have you ever gone against the math to follow a dream?

How Decision Doesn Always Make Really Works

In short, how To Recover From A Financial SetbackHow do you handle financial setbacks and be sure they don’t complete derail your financial plan? Here's what we did after a recent unexpected expense.

Dave Ramsey's Financial Peace University: Week 4 - Dumping DebtIn Review - Last Week Last week was our third week in Dave Ramsey's "Financial Peace University". The lesson for the week focused on cash… SharePin3Tweet18Share223 Shares.

Frequently Asked Questions

How can I save money on decision doesn always make?

Compare prices across a few retailers, look for active coupon codes, and time bigger buys around sales events. There are plenty of reasons why this is the case,  but for me the most convincing one is that we as humans aren’t perfect logical machines.  Just since something is logical doesn’t mean that we’ll follow through with it.....

Is it worth shopping around for decision doesn always make?

Usually yes. Example - The Debt Snowball One of the best examples of this is Dave Ramsey’s debt snowball.  The debt snowball by all accounts is not the most financially sound method to get out of debt.  It says that you should: List....

What should I check before buying?

Read the terms, confirm any code still works, and factor in shipping or returns. The reason why Ramsey doesn’t suggest this method, though, is since it doesn’t take into account the human element.   He says that debt elimination is about 80% behavior modification and about 20% head knowledge.

Smart Ways to Save More on Decision Doesn Always Make

• Time non urgent purchases around major sale events for the deepest cuts.
• Leave items in your cart for a day; some stores send a follow up discount.
• Pair cashback with a coupon so you save twice on the same order.
• Stack a coupon code with an existing sale whenever the store allows it.
• Sign up for the retailer newsletter to catch first time and seasonal discounts.

Final Thoughts

Before you check out, line up decision doesn always make against current promotions and any codes you can stack. Small habits like these add up to real savings over a year.

Originally published at biblemoneymatters.com.