decision making http://www.wisebread.com/taxonomy/term/13782/all en-US 4 Reasons 'Frugal' Shouldn't be a Dirty Word http://www.wisebread.com/4-reasons-frugal-shouldnt-be-a-dirty-word <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/4-reasons-frugal-shouldnt-be-a-dirty-word" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/imagecache/250w/blog-images/woman_shhh_face_000020798468.jpg" alt="Woman learning why frugal isn&#039;t a dirty word" title="" class="imagecache imagecache-250w" width="250" height="140" /></a> </div> </div> </div> <p>What does living frugally mean to you? Do you think of deprivation and doing without, people merely scraping through in a life barely lived? Or maybe you think of fanatics, evangelizing for their way of life while extreme couponing and haggling in Walmart?</p> <p>Frugal living has had quite the PR problem. But modern frugality really isn't about hair shirts and gruel. Today many people come to frugal living through conscious choice, rather than necessity. They often find it's a lifestyle choice that can actually enrich. Here's why.</p> <h2>1. Frugal Choices Are Value Driven</h2> <p>It's a common misconception that frugal living is all about saving money &mdash; but sometimes the frugal choice is not the cheapest one. To take a simple example, the frugal choice when buying a key item you need to be long lasting, like a winter coat, might not be visiting the thrift store. You might actually be better off buying new, and buying the best quality you can afford. Apart from the wider range available, this is a good way to avoid the <a href="http://www.wisebread.com/the-high-cost-of-cheap-clothes">high price of cheap clothes</a>.</p> <p>That might not sound so different from the choice anyone else might make, but the crucial point is that it's an <em>examined </em>decision. Frugal choices are mindful, where wall-to-wall commercials and our consumer society tend to promote mindless, reactionary buying.</p> <p>A frugal mindset means that you're aware of your spending, thinking about the real purpose of a purchase before you make it. At its core, modern frugality is not about penny pinching. It's about attaching value to the right stuff. Which, of course, might not be stuff at all.</p> <h2>2. Living Frugally Offers Independence</h2> <p>There's little we Millennials prize more than independence. At first glance, frugality might seem to remove independence, forcing you to forgo opportunities and limiting your choices. And it's true that on a day to day basis, a frugal approach will see you dropping your skinny Starbucks latte habit, and put the kibosh on the designer handbag collection. But in the long run, a frugal life offers great independence.</p> <p>People who choose to live frugally deliberately reduce their material needs. If you need less, you can save more &mdash; but many choose frugality not for the option of filling up the coffers, but for the opportunity to rebalance work and life.</p> <p>Free from the need to keep up with your neighbors, you can critically examine how much money you need to earn for a lifestyle you will enjoy. As your financial needs diminish, you can choose to cut your working hours, take time for your hobbies, visit family, or study. Maybe you could even retire early.</p> <h2>3. Being Frugal Fosters Creativity</h2> <p>Necessity, as they say, is the mother of invention. Being frugal is a surefire way to foster self discipline and creativity.</p> <p>Take birthdays or celebrations, for example. When you start from a frugal mindset, gifts and parties are not about how much you spend, but about how much you <em>think</em>. No last minute, guilt-driven smash and grab at the shopping mall here. The same goes for eating. Frugal living is about cooking from scratch, planning a menu and shopping list, understanding and working with seasonality. Put down the <a href="http://www.wisebread.com/how-to-stop-the-takeout-meal-cycle-and-save">take-out menu</a>.</p> <p>Some elements of a frugal life are more demanding than others. That's where the self discipline comes in. But we humans are meant to be able to look after ourselves, and modern conveniences have stripped away some of that. Getting frugal is a great way to get creative, and experience the rewarding feeling of making something yourself, whether it's a gift or a gazpacho.</p> <h2>4. Frugality Promotes Personal Connections</h2> <p>Living frugally naturally leads to valuing experiences more than things. By being open and mindful to experiences, frugality can deepen personal connections.</p> <p>Traditional research into the science of happiness agrees. The Easterlin Paradox suggests that people could <a href="http://www-bcf.usc.edu/~easterl/papers/Happiness.pdf">ultimately be happier</a> if they devoted more time to non financial goals like spending time with family, or improving our health. More money, once your basic financial needs are met, does not make us happier &mdash; the idea that it does has been described as the &quot;money illusion.&quot;</p> <p>One reason for this is that a more consumerist outlook can inadvertently foster a sense of competitiveness. Even with those closest to you, you might get a jealous twinge looking at the latest flash purchase. Instead of comparing designer high heels, frugal people might share an experience with those around them. Get into the countryside for a walk or cook a meal together &mdash; just stay away from the mall!</p> <p>So, far from merely enduring a miserable existence, perhaps those embracing a frugal life are actually demonstrating that you can have more, with less. Maybe collecting a life full of experience is more rewarding than a closet full of clothes.</p> <p><em>What do you value about frugality?</em></p> <br /><div id="custom_wisebread_footer"><div id="rss_tagline">This article is from <a href="http://www.wisebread.com/claire-millard">Claire Millard</a> of <a href="http://www.wisebread.com/4-reasons-frugal-shouldnt-be-a-dirty-word">Wise Bread</a>, an award-winning personal finance and <a href="http://www.wisebread.com/credit-cards">credit card comparison</a> website. Read more great articles from Wise Bread:</div><div class="view view-similarterms view-id-similarterms view-display-id-block_2 view-dom-id-1"> <div class="view-content"> <div class="item-list"> <ul> <li class="views-row views-row-1 views-row-odd views-row-first"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/cooking-for-beginners-10-recipes-for-kitchen-newbies">Cooking for Beginners: 10 Recipes for Kitchen Newbies</a></span> </div> </li> <li class="views-row views-row-2 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/the-5-best-exercise-mats">The 5 Best Exercise Mats</a></span> </div> </li> <li class="views-row views-row-3 views-row-odd"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/this-is-how-americans-spent-their-money-in-the-1950s">This Is How Americans Spent Their Money in the 1950s</a></span> </div> </li> <li class="views-row views-row-4 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/6-ways-millennials-have-changed-money-so-far">6 Ways Millennials Have Changed Money (So Far)</a></span> </div> </li> <li class="views-row views-row-5 views-row-odd views-row-last"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/going-off-the-grid-is-a-lot-harder-than-you-think">Going Off the Grid Is a Lot Harder Than You Think</a></span> </div> </li> </ul> </div> </div> </div> </div><br/></br> Lifestyle being frugal Cooking decision making independence millennials shopping Fri, 01 Apr 2016 10:30:05 +0000 Claire Millard 1682365 at http://www.wisebread.com 3 Ways Good Sleep Makes You Wealthier http://www.wisebread.com/3-ways-good-sleep-makes-you-wealthier <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/3-ways-good-sleep-makes-you-wealthier" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/imagecache/250w/blog-images/man_tired_work_000075631055.jpg" alt="Man learning ways a good night&#039;s sleep can improve his finances" title="" class="imagecache imagecache-250w" width="250" height="140" /></a> </div> </div> </div> <p>After my first child was born, I got a crash course in dealing with extended sleep deprivation. It only took a few months of poor sleep for me to finally comprehend why the Geneva Convention prohibits sleep deprivation as an interrogation tactic.</p> <p>While my sleeplessness may not have reached the level of a war crime, I could definitely feel a difference in how I reacted to everything in my life. Not only did I spend my days operating in slo-mo zombie mode, but I knew that I kept making short-term decisions that would hurt me in the long run.</p> <p>My experience is hardly unique. You have probably also faced a zombie day after a bout with sleep deprivation. But chronic sleeplessness hurts more than just your ability to get through the day &mdash; it's also destructive to your finances.</p> <p>Here are three ways that not getting enough sleep hurts your bottom line. (See also: <a href="http://www.wisebread.com/7-ways-to-boost-your-finances-while-you-sleep">7 Ways to Boost Your Finances While You Sleep</a>)</p> <h2>1. Optimism Bias</h2> <p>You may feel irritable after a bad night's sleep, but your brain doesn't necessarily agree. A Duke University study has found that people who don't get enough sleep are more prone to <a href="http://corporate.dukemedicine.org/news_and_publications/news_office/news/sleep-deprived-people-make-risky-decisions-based-on-too-much-optimism">unwarranted optimism</a>. Specifically, lack of sleep makes your brain primed to chase rewards rather than avoid losses. This is called the &quot;optimism bias.&quot;</p> <p>The study asked participants to engage in a series of economic decision-making tasks, both after a regular night's sleep and after a night of sleep deprivation. After a sleepless night, the participants were more likely to make decisions as if positive consequences were the more likely outcome. They viewed negative consequences as less of a risk.</p> <p>This is part of the reason why you'll find casinos so brightly lit and stimulating. The environment keeps gamblers awake and unaware of their own fatigue, so they keep chasing winnings that they'll never reach.</p> <p>But even non-gamblers can be hurt by an insomnia-induced optimism bias. Everything from choosing investments to deciding whether to change careers to operating heavy machinery can be affected by irrational optimism. Getting any such decision wrong can have a devastating effect on your finances (to say the least).</p> <h2>2. Decision Fatigue</h2> <p>You have probably noticed that it's harder to get anything accomplished at the end of your workday, even if you enjoyed a perfect night's sleep the evening before. What you're experiencing is something known as <a href="http://www.nytimes.com/2011/08/21/magazine/do-you-suffer-from-decision-fatigue.html?pagewanted=all&amp;_r=1">decision fatigue</a>. Our brains only have so much bandwidth for making decisions. And after making small decision after small decision all day long, you're left with less mental energy to make the big choices.</p> <p>Decision fatigue is made worse when you're tired &mdash; &quot;fatigue&quot; is right there in the name, after all. But insomnia-fueled decision fatigue can also reduce your ability to make trade-offs. This decreased ability can leave you vulnerable to bad financial decisions.</p> <p>Figuring out the best option among many is the basis of modern financial decisions, and it is the most taxing form of decision-making. Trying to decide between a cheaper flight and a more convenient one, or which 401K option is best for you, or even whether to cook the chicken you have defrosting at home or run through the drive-thru, are all much harder choices when you are fatigued.</p> <h2>3. Impaired Cognitive Functioning</h2> <p>Have you ever tried to do simple math when you were exhausted? Anything from addition and subtraction to figuring out simple percentages can be remarkably difficult when you have not had enough sleep. That's because sleep deprivation impairs your cognitive functioning. In fact, researchers have found that even a single sleepless night increases concentrations of the molecules <a href="http://www.journalsleep.org/AcceptedPapers/SP-100-13.pdf">NSE and S-100B</a>, chemicals that also increase in brains after experiencing a blow to the head.</p> <p>Yes, one bad night of sleep is like being kicked in the head.</p> <p>The effects are also cumulative, which means you don't just feel stupid after five nights of poor sleep &mdash; you really are more stupid. This kind of cognitive impairment affects everything from planning, to the ability to pay attention, to memory. This is why drowsy driving is so dangerous, since it's a skill that requires all types of cognitive functioning.</p> <p>Even if you don't get behind the wheel when you're tired, your wallet can easily be affected by such cognitive impairment. Not only will you overpay at restaurants when calculating an 18% tip is beyond your mathematical capabilities, but you are likely to blow your grocery budget when you can't easily keep a running tally of your purchases, or overdraw your checking account when you forget about upcoming charges.</p> <p>And it's not just you feeling the financial pinch of sleep-related cognitive impairment. According to a 2011 study published in the journal <em>Sleep</em>, lack of sleep costs the United States <a href="http://www.ncbi.nlm.nih.gov/pmc/articles/PMC3157657/">$63.2 billion per year</a>, primarily due to presenteeism &mdash; when the worker's body may be in the office, but his brain is out to lunch.</p> <h2>The Sleep Solution</h2> <p>Luckily, all of these insomnia-related financial consequences can be avoided if you commit to getting a good night's sleep every night. If you're already in a cycle of sleep deprivation, this may sound easier said than done, but there are several things you can do to improve your sleep and combat the money-sapping brain fog.</p> <h3>Before Bed Routine</h3> <p>One of the best ways to prepare yourself for sleep each night is to engage in a bedtime routine. Not only will such a routine put your body in the habit of going to sleep after running through your nightly tasks, but it can also help to combat decision fatigue.</p> <p>For instance, if you make planning daily decisions part of your nightly bedtime routine, then you will not have to decide what to wear, what to eat for breakfast, or when you will run errands during your day. Making these decisions before bed will give you a clean, decision-free slate in the morning, even if your sleep isn't perfectly restful.</p> <h3>Darkened Bedroom</h3> <p>According to research, our <a href="http://www.ncbi.nlm.nih.gov/pmc/articles/PMC1188623/">exposure to light</a> helps to regulate both internal temperature and melatonin production, both of which are vital for our sleep and wake cues. Unfortunately, artificial light can easily disrupt our body's cues.</p> <p>If your room is exposed to too much light at night, your body will think it is time to wake up. Additionally, trying to go to sleep after watching TV or checking Facebook on your phone is very difficult because the artificial light inhibits the production of melatonin, which makes you feel sleepy.</p> <p>That means you have a ready-made excuse for turning off your phone at bedtime and keeping your laptop out of your bedroom. Any increase in productivity you may think you are experiencing by answering email in bed is cancelled out by the cognitive impairment you feel from night after night of tossing and turning.</p> <h3>Dedicated Bed</h3> <p>Humans are creatures of habit, and our bodies will habitually do the things that are cued by specific environments. For instance, you probably fasten your seatbelt without thinking about it each day when you get in the car. Your body has learned that seatbelt buckling is what you do in a bucket seat.</p> <p>This means your sleep can improve a great deal if you only <a href="http://www.nateliason.com/cure-insomnia-wake-up-early-sleep/#fall-asleep">use your bed for sleeping</a> (and, ahem, other bedroom-specific activities). Even reading a book in bed confuses the cues, since your body doesn't automatically go into the &quot;time for sleep&quot; mode when you get under the covers.</p> <p>But dedicating your bed to sleep will eventually make falling asleep as habitual as buckling your seat belt. Your brain and body will know to power down for the night once your head hits the pillow.</p> <h2>Defogging Your Sleep-Deprived Brain</h2> <p>Some sleeplessness is outside of your control. If you live in a construction zone, work third shift, or recently had a tiny, anti-sleep dictator join your household, then you might have trouble implementing better sleep habits until your circumstances change.</p> <p>But it's important to remember that getting a good night's sleep consistently doesn't just help you feel better, it helps your finances, too.</p> <p><em>How do you keep sleeplessness from harming your wallet?</em></p> <br /><div id="custom_wisebread_footer"><div id="rss_tagline">This article is from <a href="http://www.wisebread.com/emily-guy-birken">Emily Guy Birken</a> of <a href="http://www.wisebread.com/3-ways-good-sleep-makes-you-wealthier">Wise Bread</a>, an award-winning personal finance and <a href="http://www.wisebread.com/credit-cards">credit card comparison</a> website. Read more great articles from Wise Bread:</div><div class="view view-similarterms view-id-similarterms view-display-id-block_2 view-dom-id-2"> <div class="view-content"> <div class="item-list"> <ul> <li class="views-row views-row-1 views-row-odd views-row-first"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/5-expenses-to-ditch-after-age-30">5 Expenses to Ditch After Age 30</a></span> </div> </li> <li class="views-row views-row-2 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/what-was-your-financial-fork-in-the-road">What Was Your Financial Fork in the Road?</a></span> </div> </li> <li class="views-row views-row-3 views-row-odd"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/5-money-conversations-every-couple-should-have">5 Money Conversations Every Couple Should Have</a></span> </div> </li> <li class="views-row views-row-4 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/3-simple-ways-to-split-bills-with-your-spouse">3 Simple Ways to Split Bills With Your Spouse</a></span> </div> </li> <li class="views-row views-row-5 views-row-odd views-row-last"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/8-reasons-youre-bad-at-money-and-how-to-fix-it-asap">8 Reasons You&#039;re Bad at Money — And How to Fix It ASAP</a></span> </div> </li> </ul> </div> </div> </div> </div><br/></br> Personal Finance Lifestyle bad habits decision making impaired judgment sleep deprivation Thu, 07 Jan 2016 14:00:03 +0000 Emily Guy Birken 1632873 at http://www.wisebread.com 10 Ways to Improve Your Decision-Making Skills http://www.wisebread.com/10-ways-to-improve-your-decision-making-skills <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/10-ways-to-improve-your-decision-making-skills" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/imagecache/250w/blog-images/5959910204_1327551301_z.jpg" alt="decisions" title="decisions" class="imagecache imagecache-250w" width="250" height="185" /></a> </div> </div> </div> <p>&ldquo;Where should we go for dinner?&rdquo;</p> <p>&ldquo;What movie do you want to see?&rdquo;</p> <p>&ldquo;Should I buy that shirt or save my money?&rdquo;</p> <p>We make decisions every day of our lives, but with the wide array of options presented to us, we&rsquo;re often plagued with indecisiveness and regret over opportunity costs incurred from &ldquo;wrong&rdquo; decisions. The following ten tips can help you improve your decision-making skills and reduce indecision in your everyday life. (See also: <a href="http://www.wisebread.com/a-94-year-olds-take-on-making-good-decisions">A 94-Year-Old's Take on&nbsp;Making Good Decisions</a>)</p> <h2>Individual Decision-Making</h2> <p>When you're the only one making the decision, try one of these techniques.</p> <p><strong>1. Cost-Benefit Analysis</strong></p> <p>Before reaching the ultimate decision, it&rsquo;s important to weigh the pros and the cons to ensure that you&rsquo;re making the best decision possible. This requires a cost-benefit analysis, in which you examine the outcome to every possible route (both positive and negative). This will help you see the <i>opportunity costs</i>, or the things you miss out on when one decision is preferred over another.</p> <p><strong>2. Narrow Your Options</strong></p> <p>To simplify the cost-benefit analyzing, limit yourself to fewer options. When more choices are presented to us, <a href="http://www.apa.org/monitor/jun04/toomany.aspx" target="_blank">the greater the difficulty in making a final decision</a>. More choices can lead to more regret because we consider all of the missed possibilities and worry whether we could have chosen one of the many other routes that were available. As such, narrowing your options will lead to greater peace of mind.</p> <p><strong>3. Evaluate the Significance</strong></p> <p>How much time should you spend mulling over a potential decision? Ten seconds? Ten minutes? Ten hours or more? It all depends on what&rsquo;s at stake. To minimize agonizing indecision, determine the significance of a decision (How great of an impact will it have on my life? How much will it cost me?), and set a deadline accordingly.</p> <p><strong>4. Don&rsquo;t Sweat the Small Stuff</strong></p> <p>If it&rsquo;s something as simple as deciding where to go for lunch or what to watch on TV, remember to keep things in perspective and keep your timeframe for decisions to a minimum. This is closely tied with evaluating the significance of a decision &mdash; if it won&rsquo;t affect you or others in a significant way, then don&rsquo;t waste time endlessly debating between your options.</p> <p><strong>5. Do Your Research</strong></p> <p>This may seem obvious, but when it comes to making major decisions &mdash; new cell phone or laptop, car brand, etc. &mdash; putting in the time and effort to <a href="http://www.wisebread.com/smart-shopping-guide-to-researching-a-purchase">fully inform yourself about your impending purchase</a> can mean the difference between product satisfaction and relentless frustration.</p> <p><strong>6. Get a Well-Informed Opinion</strong></p> <p>It&rsquo;s more than just researching the facts and logistics of a decision &mdash; getting a personal opinion can also improve your decision-making by giving you the confidence and reassurance that you&rsquo;re making the right decision. Whether it&rsquo;s asking your auto mechanic friend about a car purchase or checking Consumer Reports<i> </i>before buying a new appliance for your kitchen, informed opinions are quite helpful.</p> <h2>Group Decision-Making</h2> <p>Trying to decide with a group? Use one of these tactics.</p> <p><strong>7. Practice Conflict Management</strong></p> <p>Making decisions with a group seems to complicate decision-making. Multiple parties heightens the chance of conflict, so to prepare yourself for these situations, it&rsquo;s always useful to practice conflict management. Identify the difference between a win-lose situation (such as compromises where one side gives up what they want to please another) and win-win situations (such as accommodation, when the two parties agree to give up some things in order to agree on other things).</p> <p><strong>8. Plan Ahead</strong></p> <p>When you have a group decision to make, it&rsquo;s best to decide the details well in advance in order to avoid conflict amongst group members immediately prior to the event. This could be used for movie nights or dinner parties; while it dampers the spontaneity of plans, it improves the decision-making skills of everyone involved and decreases the likelihood of bickering amongst the group.</p> <p><strong>9. Take Charge!</strong></p> <p>There&rsquo;s a time to give in and there&rsquo;s a time to be assertive. If nobody is taking a firm stance on a decision, <a href="http://www.wisebread.com/leadership-by-listening">take charge</a>! Otherwise, you&rsquo;ll squander precious time trying to decide on something when you could have been out having fun or being productive.</p> <p><strong>10. Don&rsquo;t Dwell on Mistakes</strong></p> <p>The greatest impediment to good decision-making is beating up on yourself for past mistakes. Living with post-decision angst and regret hurts your ability to decide on things swiftly and efficiently in the future, so instead of <a href="http://www.wisebread.com/how-to-learn-from-your-mistakes">dwelling on errors and failures</a>, make a decision and don&rsquo;t look back once you&rsquo;ve followed through.</p> <br /><div id="custom_wisebread_footer"><div id="rss_tagline">This article is from <a href="http://www.wisebread.com/kelly-kehoe">Kelly Kehoe</a> of <a href="http://www.wisebread.com/10-ways-to-improve-your-decision-making-skills">Wise Bread</a>, an award-winning personal finance and <a href="http://www.wisebread.com/credit-cards">credit card comparison</a> website. Read more great articles from Wise Bread:</div><div class="view view-similarterms view-id-similarterms view-display-id-block_2 view-dom-id-3"> <div class="view-content"> <div class="item-list"> <ul> <li class="views-row views-row-1 views-row-odd views-row-first"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/10-self-improvement-apps-to-make-you-smarter-stronger-and-happier">10 Self-Improvement Apps to Make You Smarter, Stronger, and Happier</a></span> </div> </li> <li class="views-row views-row-2 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/7-easy-ways-to-have-energy-after-work">7 Easy Ways to Have Energy After Work</a></span> </div> </li> <li class="views-row views-row-3 views-row-odd"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/kill-boredom-with-these-34-fun-and-productive-projects">Kill Boredom With These 34 Fun and Productive Projects</a></span> </div> </li> <li class="views-row views-row-4 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/change-your-life-by-learning-how-to-admit-youre-wrong">Change Your Life by Learning How to Admit You&#039;re Wrong</a></span> </div> </li> <li class="views-row views-row-5 views-row-odd views-row-last"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/7-steps-to-improving-your-critical-thinking">7 Steps to Improving Your Critical Thinking</a></span> </div> </li> </ul> </div> </div> </div> </div><br/></br> Personal Development Productivity communication skills decision making Mistakes Mon, 14 Jan 2013 11:24:35 +0000 Kelly Kehoe 963114 at http://www.wisebread.com 7 Steps to Improving Your Critical Thinking http://www.wisebread.com/7-steps-to-improving-your-critical-thinking <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/7-steps-to-improving-your-critical-thinking" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/imagecache/250w/blog-images/6773236388_d2776ace5a_z.jpg" alt="thinking" title="thinking" class="imagecache imagecache-250w" width="250" height="141" /></a> </div> </div> </div> <p>Every day, I&rsquo;m amazed at the amount of information I consume; I listen to the news on my morning run, scan the papers while I&rsquo;m eating breakfast, check my social media accounts throughout the day, and watch some TV before I go to bed, all while getting constant updates via email and Twitter. That&rsquo;s pretty overwhelming on its own, but things get really interesting when some of that information is biased, inaccurate, or just plain made up. It makes it hard to know what to believe. But even with all the competing sources and opinions out there, getting the truth &mdash; or at least close to it &mdash; matters. What you believe affects what you buy, what you do, who you vote for, and even how you feel. In other words, it virtually dictates how you live your life.</p> <p>So how can you sort the wheat from the chaff? Well, one clear way is by learning to think more critically. Critical thinking is as simple as it sounds &mdash; it&rsquo;s just a way of thinking that helps you get a little closer to the best answer. So the next time you have a problem to solve, a decision to make or a claim to evaluate, you can decide whether it&rsquo;s likely to be true &mdash; and if you should do anything about it. Here&rsquo;s how. (See also:&nbsp;<a href="http://www.wisebread.com/how-to-improve-your-memory-and-even-get-a-little-smarter">How to&nbsp;Improve Your Memory&nbsp;(and Even&nbsp;Get a Little Smarter)</a>)</p> <h3>1. Don&rsquo;t Take Anything at Face Value</h3> <p>The first step to thinking critically is to learn to evaluate what you hear, what you read, and what you decide to do. So, rather than doing something because it&rsquo;s what you&rsquo;ve always done or accepting what you&rsquo;ve heard as the truth, spend some time just thinking. What&rsquo;s the problem? What are the possible solutions? What are the pros and cons of each? Of course, you still have to decide what to believe and what to do, but if you really evaluate things, you&rsquo;re likely to make a better, more reasoned choice.</p> <h3>2. Consider Motive</h3> <p>We recently got a call from our cellular service provider about changing our very old, very <a href="http://www.wisebread.com/kick-that-cell-phone-contract-save-with-a-prepaid-plan">cheap cell phone plan</a>. They claimed they could give us a new plan that would provide better value. But why, my partner asked, would the company be interested in pursuing us so that we could pay less? Aren&rsquo;t companies generally interested in making more money? Good question, right? And the reason we were asking it is because we questioned the cellular phone company&rsquo;s motives. What they said just didn&rsquo;t make sense.&nbsp;</p> <p>Where information is coming from is a key part of thinking critically about it. Everyone has a motive and a bias. Sometimes, like the cellular phone company, it&rsquo;s pretty obvious; other times, it&rsquo;s a lot harder to detect. Just know that where any information comes from should affect how you evaluate it &mdash; and whether you decide to act on it.</p> <h3>3. Do Your Research</h3> <p>All the information that gets thrown at us on a daily basis can be overwhelming, but if you decide to take matters into your own hands, it can also be a very powerful tool. If you have a problem to solve, a decision to make, or a perspective to evaluate, get onto Google and start reading about it. The more information you have, the better prepared you&rsquo;ll be to think things through and come up with a reasonable answer to your query.</p> <h3>4. Ask Questions</h3> <p>I sometimes find myself shying away from questions. They can make me feel like a bit of a dummy, especially when whoever&rsquo;s fielding them isn&rsquo;t receptive. But mostly, I can&rsquo;t help myself. I just need to know! And once you go down that rabbit hole, you not only learn more, but often discover whole new ways of thinking about things. I think those other perspectives can also help you get closer to thinking through a problem or uncovering what&rsquo;s what, which brings me to my next point ...</p> <h3>5. Don&rsquo;t Assume You&rsquo;re Right</h3> <p>I know it&rsquo;s hard. I struggle with the hard-headed desire to be right as much as the next person. Because being right feels awesome. It&rsquo;s an ego trip almost everyone aims to take at some time or another. But assuming you&rsquo;re right will often put you on the wrong track when it comes to thinking critically. Because if you don&rsquo;t take in other perspectives and points of view, and think them over, and compare them to your own, you really aren&rsquo;t doing much thinking at all &mdash; and certainly not the critical kind.</p> <h3>6. Break It Down</h3> <p>Being able to see the big picture is often touted as a great quality, but I&rsquo;d wager that being able to see that picture for all its components is even better. After all, most problems are too big to solve all at once, but they can be broken down into smaller parts. The smaller the parts, the easier it&rsquo;ll be to evaluate them individually and arrive at a solution. This is essentially what scientists do; before they can figure out how a bigger system &mdash; such as our bodies or an ecosystem &mdash; works, they have to understand all the parts of that system, how they work, and how they relate to each other.</p> <h3>7. Keep It Simple</h3> <p>In the scientific community, a line of reasoning called Occam&rsquo;s razor is often used to decide which hypothesis is most likely to be true. This means finding the simplest explanation that fits all facts. This is what you would call the most obvious explanation, and the one that should be preferred, at least until it&rsquo;s proven wrong. Often, Occam&rsquo;s razor is just plain common sense. Sure, it&rsquo;s possible that the high-priced skin cream on TV will <a href="http://www.wisebread.com/advertising-jargon-that-aims-to-mislead">make you look 20 years younger</a> &mdash; even though you&rsquo;ve never heard of it, and neither has anyone else. What&rsquo;s more likely is that the model shown in the ad really is 20 years old.</p> <p>Critical thinking isn&rsquo;t easy. It involves letting go of what we want to believe and embracing a whole bunch of new information. It&rsquo;s uncomfortable, but it&rsquo;s also interesting. And when you do your research and finally lay out what you believe to be the facts, you&rsquo;ll probably be surprised by what you uncover. It might not be what you were expecting, but chances are it&rsquo;ll be closer to the truth.</p> <br /><div id="custom_wisebread_footer"><div id="rss_tagline">This article is from <a href="http://www.wisebread.com/tara-struyk">Tara Struyk</a> of <a href="http://www.wisebread.com/7-steps-to-improving-your-critical-thinking">Wise Bread</a>, an award-winning personal finance and <a href="http://www.wisebread.com/credit-cards">credit card comparison</a> website. Read more great articles from Wise Bread:</div><div class="view view-similarterms view-id-similarterms view-display-id-block_2 view-dom-id-4"> <div class="view-content"> <div class="item-list"> <ul> <li class="views-row views-row-1 views-row-odd views-row-first"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/10-ways-to-improve-your-decision-making-skills">10 Ways to Improve Your Decision-Making Skills</a></span> </div> </li> <li class="views-row views-row-2 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/a-94-year-olds-take-on-making-good-decisions">A 94-Year-Old&#039;s Take on Making Good Decisions</a></span> </div> </li> <li class="views-row views-row-3 views-row-odd"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/this-is-why-you-settle-and-how-to-stop">This Is Why You Settle (and How to Stop)</a></span> </div> </li> <li class="views-row views-row-4 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/feeling-stuck-100-ways-to-change-your-life">Feeling Stuck? 100 Ways to Change Your Life</a></span> </div> </li> <li class="views-row views-row-5 views-row-odd views-row-last"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/25-ways-to-feel-better-fast">25 Ways to Feel Better Fast</a></span> </div> </li> </ul> </div> </div> </div> </div><br/></br> Personal Development choices critical thinking decision making Wed, 29 Aug 2012 09:48:43 +0000 Tara Struyk 952407 at http://www.wisebread.com The Secret to Making Tough Financial Decisions http://www.wisebread.com/the-secret-to-making-tough-financial-decisions <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/the-secret-to-making-tough-financial-decisions" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/imagecache/250w/blog-images/3098444001_0b000d1e94_z.jpg" alt="women shopping" title="women shopping" class="imagecache imagecache-250w" width="250" height="167" /></a> </div> </div> </div> <p>We all know people who are great at getting things done. But whether they deliver at work, always find the time to fit in a workout, or make tons of time for family and friends, it all comes down to the same thing &mdash; priorities. Yup, you know where I&rsquo;m going with this. I&rsquo;m talking about money, because the way you handle it is a matter of priority, too.</p> <p>How do I know this? Well, I happen to come from a very frugal family, so I have a behind-the-scenes look at what makes frugal minds tick. As a result, I can say with all confidence that making difficult (and often important) financial choices is a frame of mind that frugal people live day by day through all the little decisions they make. (See also: <a href="http://www.wisebread.com/the-best-kept-secret-to-frugal-living">The Best-Kept Secret to Frugal Living</a>)</p> <p>Let me give you an example. It happened when I was about 10 years old, on one of the many shopping trips I took with my mom for new shoes. (What can I say? I went through a lot of sizes!) I&rsquo;m a big shoe fanatic, so I still distinctly remember nearly every pair I ever picked out. One evening, my mom, my super-cool best friend, and I headed to the mall. We were on a mission, and we weren&rsquo;t coming home until I had new running shoes.</p> <p>At least that&rsquo;s how I felt about it. I was &mdash; and still am &mdash; a very picky shoe shopper. These particular shoes had to be light, they had to be fast, and they had to be cushioned by as much air as money could buy. Most importantly, their appearance had to conform to all the delicate rules of style that would keep other kids from laughing at me. Needless to say, picking them out took quite some time; by the time I&rsquo;d found the perfect pair, we had spent hours crossing the entire mall.</p> <p>But I knew these were the shoes. They were silver with lilac accents, they had a respectable air-filled pod under the heel, and I <i>had</i> to have them. My mom checked the fit. She deemed the price acceptable. My best friend gave them a thumbs-up. I admired my new-sneakered feet. My mom paid the bill.</p> <p>Then, we headed back across the mall to our car. I think now would be a good time to mention that we were shopping at West Edmonton Mall, which, at that time, was the largest mall in the world. (It&rsquo;s since been surpassed by a handful of mega malls in Asia and the Middle East.) End to end, it&rsquo;s several city blocks long. That is one long walk, but I didn&rsquo;t mind &mdash; I was bouncing along with my best friend in my shiny brand-new running shoes.</p> <p>On our way out of the mall, we crossed through a department store, passing the shoe section. And there were my shoes, on display. I was excited to see them...until I noticed that they were on sale &mdash; $5 cheaper than the ones I had on my feet.</p> <p>&ldquo;No big deal,&rdquo; my best friend said.</p> <p>&ldquo;Yeah,&rdquo; I said. &ldquo;No big deal.&rdquo;</p> <p>I looked at my mom. She looked back at me. She was wrinkling up her nose the way she does when she&rsquo;s trying to make a tough decision. In other words, it wasn&rsquo;t looking good.</p> <p>We both know the cool thing to do here would be to forget the cheaper shoes and go home. She knew that it was critically important to me that we do the cool thing. I think she probably even considered the implications of all this in terms of my 10-year-old ego.</p> <p>We started walking again. Whew. But suddenly, her expression changed from anxious to agitated. I stopped. I stared her down. I silently begged her to keep walking. I could tell she was considering it, for my sake. Time stood still. I held my breath.</p> <p>&ldquo;I can&rsquo;t,&rdquo; she said. &ldquo;Five dollars is still five dollars.&rdquo;</p> <p>I dropped my head in resignation. Yup. We were going bargain hunting. My super-cool best friend sighed. Or maybe I just imagined that she did. At any rate, we started a long, slow walk back to the other side of the mall, then waited while my mom argued with the salesperson about matching the other store&rsquo;s price.</p> <p>At the time, I found my mom&rsquo;s dogged pursuit of five bucks deeply embarrassing. (But then at that age, I found almost anything my parents did deeply embarrassing.)</p> <p>When I recently remembered this incident, though, it made me think. My mom could not &mdash; and I mean <em>could not</em> &mdash; pay the higher price.</p> <p>We were not destitute, or even poor for that matter. That $5 was not life and death. This story doesn&rsquo;t even end with a miraculous tale involving that $5 and the power of compound interest.</p> <p>So here&rsquo;s my point &mdash; my parents were committed to making the most of what they had. That sounds good, but in practice it is much less glamorous; it meant going to a lot of trouble to avoid spending an extra $5. Actually, it was so important to my mom, she literally couldn&rsquo;t bring herself to do anything else.</p> <p>That&rsquo;s the thing about making good financial decisions. It doesn&rsquo;t just happen once a month when you decide to put some money in a savings account. In fact, the most important decisions are the ones you make each and every day. Most of these little choices &mdash; like clipping coupons for your groceries, <a href="http://www.wisebread.com/8-alternatives-to-cable-tv-that-will-keep-you-entertained">forgoing cable</a>, or going the extra mile to save a few extra dollars &mdash; don&rsquo;t seem like much. But they do add up, often in a big way.</p> <p>Saving money, then, isn&rsquo;t about grand gestures. It&rsquo;s in the details &mdash; whether you buy that cup of premium coffee in the morning or <a href="http://www.wisebread.com/french-press-coffee">make it at home</a>; whether you eat out or stay in; whether you <a href="http://www.wisebread.com/9-simple-ways-to-stop-impulse-buying">succumb to impulse buys</a> or stick to your budget; whether you walk 24 blocks to save $5 or just <em>let it go</em>.</p> <p>It&rsquo;s really that simple.</p> <p>Oh, and if staying out of debt and working toward a secure financial future aren&rsquo;t good enough reasons to motivate you to be on your best financial behavior, here&rsquo;s another one &mdash; you never know when your kids will be paying attention.</p> <br /><div id="custom_wisebread_footer"><div id="rss_tagline">This article is from <a href="http://www.wisebread.com/tara-struyk">Tara Struyk</a> of <a href="http://www.wisebread.com/the-secret-to-making-tough-financial-decisions">Wise Bread</a>, an award-winning personal finance and <a href="http://www.wisebread.com/credit-cards">credit card comparison</a> website. Read more great articles from Wise Bread:</div><div class="view view-similarterms view-id-similarterms view-display-id-block_2 view-dom-id-5"> <div class="view-content"> <div class="item-list"> <ul> <li class="views-row views-row-1 views-row-odd views-row-first"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/11-good-money-habits-that-will-keep-you-out-of-debt">11 Good Money Habits That Will Keep You Out of Debt</a></span> </div> </li> <li class="views-row views-row-2 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/how-dirty-is-your-money-really">How Dirty Is Your Money, Really?</a></span> </div> </li> <li class="views-row views-row-3 views-row-odd"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/5-big-ticket-wedding-items-you-should-borrow-instead-of-buy">5 Big Ticket Wedding Items You Should Borrow Instead of Buy</a></span> </div> </li> <li class="views-row views-row-4 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/why-you-need-to-make-financial-habits-not-goals">Why You Need to Make Financial Habits, Not Goals</a></span> </div> </li> <li class="views-row views-row-5 views-row-odd views-row-last"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/the-35-best-ways-to-spend-your-free-time-frugally">The 35 Best Ways to Spend Your Free Time (Frugally)</a></span> </div> </li> </ul> </div> </div> </div> </div><br/></br> Frugal Living decision making on sale shoe shopping Tue, 29 May 2012 10:00:12 +0000 Tara Struyk 908072 at http://www.wisebread.com A 94-Year-Old's Take on Making Good Decisions http://www.wisebread.com/a-94-year-olds-take-on-making-good-decisions <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/a-94-year-olds-take-on-making-good-decisions" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/imagecache/250w/blog-images/sunflowers_and_woman.jpg" alt="Woman in front of sunflowers" title="Woman in front of sunflowers" class="imagecache imagecache-250w" width="250" height="166" /></a> </div> </div> </div> <p>I&rsquo;ll admit it: I&rsquo;ve spent too much money, I&rsquo;ve said things I regret, and I&rsquo;ve made bad choices. To be fair, I&rsquo;m sure everyone&rsquo;s guilty of some bad choices, but it made me wonder &mdash; who am<em> I </em>to be giving advice on how to make good ones? So I decided to go out and get some advice from someone with a lot more life experience &mdash; my grandmother, who at 94 is as independent, effervescent, and opinionated as ever. I knew she&rsquo;d have some ideas for me, but boy was I surprised by her perspective. Here are some of her thoughts on making decisions. (See also: <a href="http://www.wisebread.com/7-frugal-lessons-from-great-grandmother">7 Frugal Lessons From&nbsp;Great-Grandmother</a>)</p> <h2>Be Grateful That You Have Choice</h2> <p>It&rsquo;s natural to dread having to make a tough choice &mdash; I know I often do. But what if you thought of that choice as a privilege? My grandmother grew up at a time in which women just weren&rsquo;t given much say; she was raised to listen to her parents and then later, all the big decisions went to her husband. Now that she&rsquo;s all on her own, she relishes doing what she wants, even at the cost of sometimes making choices she regrets. So next time you&rsquo;re struggling with a decision, remember that you&rsquo;re actually indulging in a luxury that has not always been available to everyone &mdash; and that in some parts of the world still isn&rsquo;t.</p> <h2>Do the Best You Can</h2> <p>How can you ever know if you&rsquo;re making the right decision in a given situation? The answer is, you don&rsquo;t. My grandmothers says all you can do is your best, because what often determines the turnout is unknown. She also told me she thinks life is a gift. I take that to mean you have to learn to love it, even when it doesn&rsquo;t always turn out the way you had hoped.</p> <h2>Do What You Want</h2> <p>As an active and able 94-year-old, my grandmother relishes being able to do whatever she wants. Maybe some of that&rsquo;s a luxury of old age, but she&rsquo;s also learned that you just can&rsquo;t make everyone happy, so it&rsquo;s best not to try. Going with the flow can often be a way of taking the easy way out. Make the decisions that are right for you.</p> <h2>Try to Be Deliberate</h2> <p>When it comes to shopping, my grandmother admits that she sometimes has a hard time <a href="http://www.wisebread.com/impulse-shopping-a-controllable-handicap">saying &ldquo;no&rdquo; to something she wants</a>. As someone who grew up and lived most of her life with very little more than the basics, I think she&rsquo;s probably the only one who sees her purchases as indulgences. Still, she says it&rsquo;s important to learn to think hard about what you want. Not so much so that you can make the right choice, but so that you can make ones that you won&rsquo;t regret.</p> <h2>Take Advice From Other People</h2> <p>My grandmother has more friends and family than anyone I know, and she often turns to other people for their <a href="http://www.wisebread.com/how-to-get-good-advice">opinions and advice</a>. She&rsquo;s not afraid to say she doesn&rsquo;t have the answers, or to seek out someone who can help, whether it&rsquo;s with filing her taxes or fixing her dryer. If you&rsquo;re struggling to make a decision, remember that you don&rsquo;t have to go it alone. Reach out to those around you for both help and support.</p> <p>I can&rsquo;t say I&rsquo;m a pro at decision-making, but my grandmother was quick to say that despite having more experience, she doesn&rsquo;t have the answers. But through all the decisions she has made &mdash; both good and bad &mdash; my grandmother is still as hopeful and spirited as ever. And that&rsquo;s a choice too.</p> <br /><div id="custom_wisebread_footer"><div id="rss_tagline">This article is from <a href="http://www.wisebread.com/tara-struyk">Tara Struyk</a> of <a href="http://www.wisebread.com/a-94-year-olds-take-on-making-good-decisions">Wise Bread</a>, an award-winning personal finance and <a href="http://www.wisebread.com/credit-cards">credit card comparison</a> website. Read more great articles from Wise Bread:</div><div class="view view-similarterms view-id-similarterms view-display-id-block_2 view-dom-id-6"> <div class="view-content"> <div class="item-list"> <ul> <li class="views-row views-row-1 views-row-odd views-row-first"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/10-ways-to-improve-your-decision-making-skills">10 Ways to Improve Your Decision-Making Skills</a></span> </div> </li> <li class="views-row views-row-2 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/7-steps-to-improving-your-critical-thinking">7 Steps to Improving Your Critical Thinking</a></span> </div> </li> <li class="views-row views-row-3 views-row-odd"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/feeling-stuck-100-ways-to-change-your-life">Feeling Stuck? 100 Ways to Change Your Life</a></span> </div> </li> <li class="views-row views-row-4 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/12-money-moves-to-make-the-moment-you-decide-to-retire">12 Money Moves to Make the Moment You Decide to Retire</a></span> </div> </li> <li class="views-row views-row-5 views-row-odd views-row-last"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/25-ways-to-feel-better-fast">25 Ways to Feel Better Fast</a></span> </div> </li> </ul> </div> </div> </div> </div><br/></br> Personal Development aging decision making grandparents Thu, 29 Dec 2011 11:36:18 +0000 Tara Struyk 839374 at http://www.wisebread.com What Was Your Financial Fork in the Road? http://www.wisebread.com/what-was-your-financial-fork-in-the-road <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/what-was-your-financial-fork-in-the-road" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/imagecache/250w/blog-images/fork_in_the_road2_0.jpg" alt="Fork in the road" title="Fork in the road" class="imagecache imagecache-250w" width="250" height="134" /></a> </div> </div> </div> <p>Most of us have that pivotal moment or experience that shakes us from our stupor and resets our financial course. Maybe it&rsquo;s a life change like bankruptcy or divorce. Maybe it&rsquo;s something as simple as getting burned once by high credit card rates or finally ditching a car loan that had your budget on cinder blocks. What was your financial fork in the road, and what fate did it save you from? (See also: <a href="http://www.wisebread.com/whats-the-best-way-to-get-out-of-debt">What's the Best Way to Get Out of Debt?</a>)</p> <p>Though I was raised by fairly conservative parents who made saving Priority One, I had my own money lesson to learn. Thankfully, it was quick and relatively painless.</p> <p>As I was finishing my senior year of high school and preparing to start college, I decided that I needed a stereo system with a CD player. At the risk of divulging my age, let me just say that CD players were the pinnacle technology back then. To my 17-year-old mind, there simply wasn&rsquo;t a higher form of musical entertainment.</p> <p>I picked out my stereo and &mdash; drum-roll, please &mdash; financed the whole thing. Because I was 17, my credit score roughly matched the outdoor temperature in early spring, and the interest rate was astronomical. Money, especially during those lean college years, was hard to come by. Going to school full-time and working 20 hours a week for $4.85 an hour didn&rsquo;t leave much room for fiscal error. That $400 stereo cost me roughly $700 in the end. When I finally &mdash; mercifully &mdash; grasped just how much labor and money I had forfeited in interest alone, something clicked. I was never quite the same again. That single event reset my entire financial course.</p> <p>The interest, the worry, the sinking realization that I had been ripped off by a lender who saw me coming a mile away &mdash; all this imprinted on my mind permanently. The experience crystallized the simple lessons my parents had been teaching implicitly and explicitly my whole life. Though I didn&rsquo;t shun credit completely, I would never again carry a balance or pay interest and fees on consumer debt. Decades later and still <a href="http://www.wisebread.com/beyond-debt-free-getting-by-in-the-new-economy">debt-free</a>, I&rsquo;ve never forgotten my &ldquo;deluxe stereo&rdquo; lesson.</p> <p>But many people never have these watershed moments. They reach their fork in the road and continue along on the well-traveled path of easy credit and high interest. It&rsquo;s easy to do. If you can pay the interest and never have a hiccup in income, consumer debt becomes a way of life. But if you&rsquo;ve read this far, my guess is you&rsquo;ve had your moment. What brought you to that financial fork in the road? Did you arrive early in life, or later? If you&rsquo;re at that crossroads right now, how is it changing the decisions you make every day and how is it altering your relationship with money?</p> <br /><div id="custom_wisebread_footer"><div id="rss_tagline">This article is from <a href="http://www.wisebread.com/kentin-waits">Kentin Waits</a> of <a href="http://www.wisebread.com/what-was-your-financial-fork-in-the-road">Wise Bread</a>, an award-winning personal finance and <a href="http://www.wisebread.com/credit-cards">credit card comparison</a> website. Read more great articles from Wise Bread:</div><div class="view view-similarterms view-id-similarterms view-display-id-block_2 view-dom-id-7"> <div class="view-content"> <div class="item-list"> <ul> <li class="views-row views-row-1 views-row-odd views-row-first"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/3-ways-good-sleep-makes-you-wealthier">3 Ways Good Sleep Makes You Wealthier</a></span> </div> </li> <li class="views-row views-row-2 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/5-money-conversations-every-couple-should-have">5 Money Conversations Every Couple Should Have</a></span> </div> </li> <li class="views-row views-row-3 views-row-odd"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/3-simple-ways-to-split-bills-with-your-spouse">3 Simple Ways to Split Bills With Your Spouse</a></span> </div> </li> <li class="views-row views-row-4 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/ow-do-you-deal-with-family-members-who-are-bad-at-managing-money">How Do You Deal With Family Members Who Are Bad At Managing Money?</a></span> </div> </li> <li class="views-row views-row-5 views-row-odd views-row-last"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/6-ways-millennials-have-changed-money-so-far">6 Ways Millennials Have Changed Money (So Far)</a></span> </div> </li> </ul> </div> </div> </div> </div><br/></br> Personal Finance Lifestyle decision making financial decisions story Wed, 24 Aug 2011 10:24:11 +0000 Kentin Waits 672836 at http://www.wisebread.com Is The Knowledge You Have About Your Business Unsatisfactory http://www.wisebread.com/small-business/is-the-knowledge-you-have-about-your-business-unsatisfactory <div class="field field-type-link field-field-url"> <div class="field-label">Link:&nbsp;</div> <div class="field-items"> <div class="field-item odd"> <a href="http://www.openforum.com/idea-hub/topics/managing/article/is-the-knowledge-you-have-about-your-business-unsatisfactory" target="_blank">http://www.openforum.com/idea-hub/topics/managing/article/is-the-knowledge-you-h...</a> </div> </div> </div> <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/small-business/is-the-knowledge-you-have-about-your-business-unsatisfactory" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/imagecache/250w/blog-images/iStock_000002056482Small.jpg" alt="" title="" class="imagecache imagecache-250w" width="250" height="166" /></a> </div> </div> </div> <p>Lord Kelvin, the British Physicist and founder of the absolute value temperature scale, taught that the inability to express knowledge in numbers renders that knowledge meager and unsatisfactory. Is the knowledge you have about your business meager and unsatisfactory?</p> <h3>The One-Employee Show</h3> <p>If you start a business by yourself and you have just one customer that buys just one product or service from you, it&rsquo;s pretty easy to track your business performance. You do not need to consult a management team, reports, or mounds of data to understand where you are and where you are going. You know every day-to-day detail of your business, and you rely on your first-hand knowledge to influence the decisions you make.</p> <h3>Introducing Complexity</h3> <p>Adding new employees, customers, and products and services to your business makes understanding performance trickier. The more complex a business, the more difficult it is for one person to be intimately involved with all of the day-to-day details on a first-hand basis. A CEO or business owner has to start to rely on what their employees, customers, and vendors tell them about the performance and health of the operations.</p> <h3>The Gut</h3> <p>As this complexity increases, the primary decision-maker in the business begins to rely more and more on his or her &ldquo;gut&rdquo;, which is intuition developed through experience, to interpret information from various sources related to the company. Without concrete, first-hand information, many entrepreneurs and founders feel like they are left to make decisions blindly, not sure if they are taking the company in the best and most beneficial direction.</p> <h3>The Numbers</h3> <p>There is a way to overcome this doubt and turn uninformed, anecdotal, gut-based decision-making into well-founded, confident decisions. It is a process of using numbers to understand and improve performance. But I&rsquo;m not talking about just any kind of numbers, because often data and numbers can leave a business owner more confused than actually foster clear, strategic, actionable knowledge.</p> <h3>Best Decisions Possible</h3> <p>Gut instincts are the base of the decision-making process. When you introduce raw data to these instincts, it has little impact. But when you turn that data into information through some basic organization and analysis, it starts to make a difference. And, when you synthesize that information into the context of where you&rsquo;ve been, where you are, and where you are going, it empowers you to make the best decisions possible for your business. Good decisions lead to improved profitability and cash flow, making the proper use of numbers extremely important to business owners.</p> <h3>Bad Information and Bad Consumers of Information</h3> <p>Not all data and analysis have a positive effect on decision-making, for two reasons. First, the data may not be worthwhile. It may be out-of-date, inaccurate, or not focused on the pivotal performance drivers of the business. Second, the person consuming the information may not know how to process it and what to do with it. In almost every company I have known, it is a combination of both.</p> <h3>Common Barriers</h3> <p>These two problems can be solved, but not without some effort. Here are a few of the common barriers entrepreneurs face when trying to use numbers to run their business:</p> <ul> <li>Not knowing what to track in the first place;</li> <li>Untrained or unskilled staff;</li> <li>Poor processes and procedures;</li> <li>Unleveraged technology and software;</li> <li>Out-dated information;</li> <li>Not knowing what to do with the data once they have it.</li> </ul> <h3>The Solution</h3> <p>The end goal is to have the right information in the right hands at the right time in the right format in the right context. Study after study shows that when companies solve the barriers to properly using numbers to run their business, performance improves. In fact, two independent studies specifically identified that about 90% of businesses that implement the use of numbers correctly saw a moderate to very high improvement in performance. The authors of <a target="_blank" href="http://www.amazon.com/Balanced-Scorecard-Translating-Strategy-Action/dp/0875846513"><i>The Balanced Scorecard</i></a> specifically identify the need for measurement systems to survive and prosper in information age competition.</p> <h3>Measurement Systems</h3> <p>I don&rsquo;t know who first coined the phrase &ldquo;that which is measured improves,&rdquo; but they must have owned a business at some point in their life. Just the act of measuring brings value, but a system that allows you to understand your past, present, and future performance quickly becomes a fix for so many problems facing businesses today. And the right measurement systems have a way of uncovering overlooked opportunities, inefficient use of working capital, and so much more.</p> <h3>Is it Worth All the Effort?</h3> <p>Have you ever felt that measuring and tracking things is an unnecessary expense, an impediment to getting more customers and growing a business? Maybe it just seemed too time consuming to be worth all the hassle. I would encourage you to consider changing your opinion on this issue as quickly as possible. If done right, knowing the numbers of your business will bring strategic insights you never considered and competitive advantages you never imagined.</p> <br /><div id="custom_wisebread_footer"><div id="rss_tagline">This article is from <a href="http://www.wisebread.com/ken-kaufman">Ken Kaufman</a> of <a href="http://www.wisebread.com/small-business/is-the-knowledge-you-have-about-your-business-unsatisfactory">Wise Bread</a>, an award-winning personal finance and <a href="http://www.wisebread.com/credit-cards">credit card comparison</a> website. Read more great articles from Wise Bread:</div><div class="view view-similarterms view-id-similarterms view-display-id-block_2 view-dom-id-8"> <div class="view-content"> <div class="item-list"> <ul> <li class="views-row views-row-1 views-row-odd views-row-first"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/250-tips-for-small-business-owners">250+ Tips for Small Business Owners</a></span> </div> </li> <li class="views-row views-row-2 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/the-5-best-credit-cards-for-small-businesses">The 5 Best Credit Cards for Small Businesses</a></span> </div> </li> <li class="views-row views-row-3 views-row-odd"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/freelance-your-way-to-more-income-and-flexibility">Freelance Your Way to More Income and Flexibility</a></span> </div> </li> <li class="views-row views-row-4 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/10-ways-to-improve-your-decision-making-skills">10 Ways to Improve Your Decision-Making Skills</a></span> </div> </li> <li class="views-row views-row-5 views-row-odd views-row-last"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/4-inspiring-stories-of-normal-people-building-a-thriving-online-store">4 Inspiring Stories of Normal People Building a Thriving Online Store</a></span> </div> </li> </ul> </div> </div> </div> </div><br/></br> Small Business Resource Center business measurement decision making metrics small business Sat, 07 May 2011 23:14:26 +0000 Ken Kaufman 532486 at http://www.wisebread.com Consumer Consciousness: Questions to Ask Before You Buy http://www.wisebread.com/consumer-consciousness-questions-to-ask-before-you-buy <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/consumer-consciousness-questions-to-ask-before-you-buy" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/imagecache/250w/blog-images/thinker.jpg" alt="" title="" class="imagecache imagecache-250w" width="250" height="145" /></a> </div> </div> </div> <p>You would think that in a land where most of the economic activity rests on the shoulders of ordinary consumers, the U.S. would have the smartest, savviest shoppers in the world. We could spot a deal from a mile away, easily calculate the true cost of ownership, translate complex marketing speak to our mother tongue, and determine price per ounce with our calculators tied behind our backs. Alas, this is not the case. Most consumers continue to be swayed by the &ldquo;dazzle&rdquo; &mdash; manipulated by misleading advertising, influenced by trends and friends, and driven by impulse. (See also: <a href="http://www.wisebread.com/impulse-shopping-a-controllable-handicap">Impulse Shopping:&nbsp;A Controllable Handicap</a>)</p> <p>To avoid making purchases I'll only regret later, I created a list of 14 questions I ask myself before I buy. They&rsquo;re designed to cut through the consumer noise and get at the true value of the item or the true motivation behind purchasing behavior. The questions don&rsquo;t fit every buying situation, but they work most of the time. Amend as needed and watch your regrets and credit card bills shrink.</p> <h3>1. Can I get this at a better price somewhere else?</h3> <p>Are you shopping at the right place to get the best price? Is there a less-expensive retailer in your area that you haven&rsquo;t checked out?</p> <h3>2. Can I get this at a better price at some other time?</h3> <p>Are you buying your lawn furniture in the spring or waiting until autumn when there are deals to be had? If your timing is predictable, retailers have you right where they want you.</p> <h3>3. Do I already own it?</h3> <p>This may seem like an odd question, but often we buy replacement items when we can&rsquo;t locate things we already own.<span style=""> </span>Does your home need an organizational makeover? Is it time to declutter and discover the wealth of items you already own but can&rsquo;t find in all the chaos?</p> <h3>4. Is this product about to be improved upon?</h3> <p>This is a tricky one. On one hand, if an object is about to be improved upon, you may want to wait for the more feature-rich model to come out and avoid upgrades later. On the other hand, older models tend to decrease in price when new versions are released and there are deals to be had if you can postpone the purchase. In either case, biding your time can pay off.</p> <h3>5. Can I borrow this product from someone else or buy it used?</h3> <p>Is it even necessary to buy an item or, at the very least, buy it new? Can you borrow a <a href="http://www.wisebread.com/upright-vacuum-cleaners-buying-guide">vacuum</a> from a neighbor for that single room in your home that&rsquo;s carpeted? If you hit a few yard sales this summer, could you find a good used vacuum for pennies on the dollar?</p> <h3>6. Does this product make my life easier or more complicated?</h3> <p>It took a brilliantly evil mind to reinvent the broom by attaching a glorified paper towel to a stick and making a simple device something that required constant refills. Any product that promises to simplify your life by eliminating a single object you already own and replacing it with an object you must &quot;feed&quot; should be relegated to the dustbin of history. It&rsquo;s not cost-effective and definitely not simple.</p> <h3>7. Does this product function independently or require add-ons to work?</h3> <p>Are you buying a single product that works on its own or one that requires more features, attachments, and upgrades to do the job? Avoiding wallet-hungry products is the best way to go.</p> <h3>8. Do I have to use credit to pay for this item and is it worth it?</h3> <p class="MsoNormal">Even the best deals are soured once you factor in credit card interest. If you have to use credit to pay for an item (and can&rsquo;t pay that credit card bill off completely during your next billing cycle), the deal better be worthy of a Facebook status update.</p> <h3>9. Am I an educated consumer of this product?</h3> <p>It&rsquo;s about time the Information Age did something more than show us funny videos of dancing cats and giggling babies. Use the tools available at your fingertips to research consumer data on products before you buy. Leverage the power of communication to make smarter buying decisions.</p> <h3>10. Is there another product that&rsquo;s just as good and less expensive?</h3> <p>This question requires an understanding of how you&rsquo;ll use the product based upon your habits and behavior. Do you need the deluxe MP3 player if you&rsquo;re just using it while you jog for 30 minutes a day? What&rsquo;s a simpler, less expensive solution that would fulfill your specific needs just as well?</p> <h3>11. Will this product still be useful in six months or a year?</h3> <p>Fast-forward through the life cycle of this product and see where you envision it in six months or a year. Be realistic &mdash; is it still being used? Has it become abstract lawn art? Is it in the garage with the rest of the yard sale stuff?</p> <h3>12. If I waited two weeks, would I want this item just as badly?</h3> <p>In other words, is this an impulse buy? Is this something that you truly need or just feel compelled to buy at this moment?</p> <h3>13. Does this product carry a warranty?</h3> <p>What&rsquo;s your recourse as a consumer if this item doesn&rsquo;t work or malfunctions after purchase? Is the manufacturer confident enough to provide a <a href="http://www.wisebread.com/how-to-take-advantage-of-free-extended-warranty-from-your-credit-card-issuer">warranty</a>, or are you on your own the minute you hand over your cash?</p> <h3>14. Is this product disposable when there is a non-disposable solution?</h3> <p>This question focuses on the environmental and budgetary impact of what we buy. Opting for reuse and rejecting single-use items whenever possible may be slightly less convenient, but more beneficial for our planet and our pocketbooks.</p> <p>As we all try to leverage the power of our dollars, screening our purchases through the filter of tough questions can be the smartest thing we do for our budgets.</p> <p><em>What are some questions you ask yourself before you buy? What have I missed?</em></p> <br /><div id="custom_wisebread_footer"><div id="rss_tagline">This article is from <a href="http://www.wisebread.com/kentin-waits">Kentin Waits</a> of <a href="http://www.wisebread.com/consumer-consciousness-questions-to-ask-before-you-buy">Wise Bread</a>, an award-winning personal finance and <a href="http://www.wisebread.com/credit-cards">credit card comparison</a> website. Read more great articles from Wise Bread:</div><div class="view view-similarterms view-id-similarterms view-display-id-block_2 view-dom-id-9"> <div class="view-content"> <div class="item-list"> <ul> <li class="views-row views-row-1 views-row-odd views-row-first"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/the-best-5-credit-cards-for-groceries">The 5 Best Credit Cards for Groceries</a></span> </div> </li> <li class="views-row views-row-2 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/the-5-best-cloth-napkins">The 5 Best Cloth Napkins</a></span> </div> </li> <li class="views-row views-row-3 views-row-odd"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/9-no-fuss-plants-that-will-brighten-your-home-until-spring">9 No-Fuss Plants That Will Brighten Your Home Until Spring</a></span> </div> </li> <li class="views-row views-row-4 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/should-you-sign-up-for-that-store-credit-card">Should You Sign Up for That Store Credit Card?</a></span> </div> </li> <li class="views-row views-row-5 views-row-odd views-row-last"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/7-reasons-you-should-always-buy-girl-scout-cookies">7 Reasons You Should Always Buy Girl Scout Cookies</a></span> </div> </li> </ul> </div> </div> </div> </div><br/></br> Shopping ask questions decision making need vs. want Tue, 03 May 2011 10:00:40 +0000 Kentin Waits 529939 at http://www.wisebread.com