Tips on getting better at making financial decisions


Disclosure: This article is not intended to be financial advice and information should be taken as educational only. Read the disclaimer.

So many of us love the feeling of being in control of our money and making our own financial decisions. That is until we face too many, some tough ones or feel overwhelmed by choices.

We can get better at making decisions and I want to help give you some tips that I've used.

Have you ever turned on the TV and tried to find something to watch? 

Back in the 90s it was flicking between channels, now its scanning through our different streaming apps.

There are so many fantastic shows and movies available, its never been better. Yet we can't make our mind up.

It seems the more choices we get, the tougher it is to decide.

Through the Internet the world has opened up like never, the amount of options we have at our disposal of seems infinite.

Is this good for us?

Is it better to have more options and avenues for choice?

I'm not sure.  It seems like we end up less satisfied when we pick something out of a hundred options, rather than picking one of three.

For some of us, the need to decide can lead to confusion, inability to choose and even stress. 

How about the supermarket, where you have 15 different types of butter to choose from. You only needed a stick but you have to decide if its unsalted, locally farmed, in a block or round, organic, farm fed or blended. A 5 second process is now a headache. 

Yeah I know picking a show to or which butter is a first world problem but its still something we deal with every single day.

The same thing happens with money.

More options means more decisions

There are now even more financial products for us to pick from.

In Australia there used to be four banks you could pick from who all offered the same range of products. I know my parents took me to the bank closest to my home to open my first bank account and that was it. They preferred the red bank over the blue or yellow bank because that's what their parents showed them. 

You have choice now. There are hundreds of banks, investment accounts, software, funds and advice given out for so many things.

This means its it's never been easier handle your money.   It's also never been easier to make the wrong decision, and I think we feel the pressure to decide.

Few of us were taught early on how to decide, what to look for or how to decide what to use, especially without money.

Making financial decisions can cripple us.

What I've worked out (mainly through my trial and error) is that there are ways to avoid this worry and self doubt. 

Let me run through how I like to decide, especially with my money and how it gives me confidence with what I decide.

Focus on the important decisions

With money people love to focus on the little things, like

  • parking somewhere $2 cheaper
  • skipping a coffee to save $4
  • Using a coupon or getting a deal

We felt proud that we've “won” by making a small decision like that. 

We beat the “system”. The “system” that wants us to spend money.

Nothing wrong with spending as I've mentioned before.
Even though we find, celebrate and repeated find these wins we still struggle with money.

Why? Because of the decisions we made but neglected to get right

  • We bought a house we couldn't afford
  • Got too much car on a bad loan
  • Haven't reviewed bills or insurance costs for years

Compare the last three examples with the three above it? Now think about the ‘win' you could make if you got a better deal on something like your mortgage or rent. 

The best thing is these are all one time decisions or tasks to complete. Yes refinancing your mortgage is a bit of work up front, but if you save $50 a week, then the $2600 a year you've saved is worth it.

How many coffees do you need to turn down to save $2600? 

It's of benefit to you to focus on the important decisions. These are things that you rarely need to consider but make up a decent proportion of your cost of living (house, car, utilities etc.)

It you get the big important things right, then you'll give yourself freedom to make the small decisions irrelevant.

Minimise the decisions you make

Have a think about all the times you made a decision today.

I'll give you a hand, you probably decided on:

  • what to wear
  • what to have for breakfast
  • what to watch on tv
  • who to talk to or call
  • what sites or apps to use

There are so many decisions! 

To help us block out some less important decisions we make, we should try to automate or simplify them. 

You see some people like Steve jobs or Mark Zuckerberg wear the same thing everyday. They want to use their brainpower on more important things.

It's ok to do the same thing over and over. If you decided on something and enjoyed the results (dinner, holiday, shopping etc) you can feel confident picking the same repeatedly.

We can say same with your finances. Reducing the time and energy you put into financial decisions can help you avoid stress and move onto something else. 

These days I blow off the things that cost under $10. Like car parking, delivery fees, coffee or late fines. Less energy used trying to work out if I want to spend money on this or not.

I also avoid regular decisions like how much to save, how much spending money we have each week. I decide my savings on as our incomes or outgoings change, with a system automating the movement of money around.

My bank transfers money for us automatically, and we know how much there is to spend and save. I'm not manually pushing money around. I'm moving on to more important things. 

We spend so much time going back and forward over such small decisions. Skip the ones that are a distraction from the bigger ones. 

Focus on what matters & what you can control. 

Prepare for your next financial decisions

So now we've cleared out the unimportant decisions and removed the pressures of the little ones, how do we make better decisions when we need to make a choice?

Well that's easy. We get better at making financial decisions.

Can you recall anyone teaching you how to decide? There's no subject at school. I vaguely remember my parents sometimes showing me how to differentiate things, but nothing that stuck with me.

Most of my understanding of decision making has come from experience working as an adult. Even then I'm wasn't sure what I was witnessing was effective decision making or not.

Luckily we have the internet at our disposal now and can jump into the minds of some of the worlds best thinkers.

I'm a big fan of online courses and books so have spent some time watching and reading to upskill myself in this area.

If you really want to get better at decision making, learn from the pros. They are out there and easily available.

For online courses I use MasterClass and have found some tips from Anna Wintour and others.

For books, I don't have any one that I want to suggest but know of countless titles available on this topic. 

If you want to know what I do though, when making decisions here is my process. 

Cast a small net 

I keep it simple. Pick three options and decide from that.

If its a new bank account, investment or credit card. I find three that look ok, compare them next ot each other and decide.

I compare things like costs, rates, returns, fine print etc so I make an informed decision, but only for 3 different products. 

Do a pre mortem

The opposite of a post mortem – which is investigating the reasons something died. For this we want to look at something before it dies and goes wrong and predict the reasons this could happen.

To do this you only need to write the worst thing that could happen if you decide one way or another.

We get so caught up with the positive awesome things that will happen, which has us overlooking the downsides.

In some situations the difference between good decision and bad might be hundred of thousands of dollars (like buying a home you cant afford).

Set low expectations

Most of our decisions are not as important as we make them to be,
We put so much pressure on yourself to get it right .

  • won't start a movie in Netflix, cause we don't want to waste our time.
  • don't order that dish cause we might not like it. 
  • won't join your colleagues for coffee cause you don't like the place they go to

Stop thinking every decision you make needs to be life changing.
Reduce your expectations of what the decision will bring and be satisfied with something ok.

Let the others go

Once I make a decision, its important to let the rest go. Throw out your notes, stop caring about the other choices you didn't pick its done.

Especially when it comes to investing, don't go checking up on how much money you could have made by buying the other thing.

I remember about 10 years ago spending time on two different bank stocks umming and ahhing about which. They were both similar so I picked the bigger company. Two months later the stock I picked bought the company I didn't pick and the smaller stocks price shot up 30% in a week. I was so frustrated. But with the stock market, its anyones guess what is going to happen. 

There's no use dwelling on the past. Use that energy to have fund with the one thing you decided on. 

It's ok. Let it go. I've learnt to. 

Instead of big financial decisions make commitments

One more thing I want to introduce you to is how I focus on my commitments rather than my decisions.

To explain the difference

  • saving money is a decision
  • saving $200 a month is a commitment

The decision is the first step and the commitment is the action to make it happen.

  • If you get a new credit card, commit to paying it off and using all its features.
  • A new investment? Commit to make sure it reaches your financial goals by automating regular contributions
  • Decide on where to live? Commit to knowing how much it will cost, travel times, local amenities etc. 

Expand and build upon what your decision is to give yourself a positive experience. 


My line of thinking is this – I don't care about how many good decisions I make as long as I avoid bad ones.

I want to avoid that bad financial decision at all costs, but I also don't want to destroy my mind making it.

Short, sharp, simple and methodical decision making is a strength.

If you want to become better at it, you can. 

Further viewing on making decisions in general (3 min video)

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Tim Ellis, creator of, helps people confidently invest and manage their money. Inspired by his own experiences, Tim is passionate about creating a financially secure future for his family and sharing his personal finance knowledge with others.