This morning I did something dumb.
I was taking folding chairs from my house back over to the church building. When I was taking the chairs out of my car, I leaned them up against the car while shutting the door.
Dumb choice: I leaned metal chairs against a car.
Yup. You guess it. I scratched the car.
Yep. I should have known better.
Nope. It didn’t ruin my day.
Smart Decision: I bought a hail damaged PT Cruiser for $1,700.
I suspect that if I owned a brand new 2014 BMW X5 I wouldn’t be any smarter than I am now, and I suspect that I probably still would have scratched the car. I think a scratch on my new $50,000 car would have had a more dramatic impact on my mood for the rest of the day.
I’ve been very open about the fact that I make dumb financial choices. Actually, my dumbness cannot be relegated only to my financial choices.
I know people who have made one bad financial mistake. Indeed, it was a dumb choice, and it has years and years of financial ramifications.
In the end, I think that you need to make enough financial decisions to prepare for the dumb ones you’ll make. Of course, the more expensive an item is, the more seriously you ought to consider it.
Here are a few questions to ask to help you avoid making BIG dumb financial decisions:
- Do I have some type of financial margin in my life? Is there an emergency fund in place to give you some padding if this decision does not work out as planned?
- Am I prepared for a less than stellar outcome? Yes, I know you’re a genius and never miscalculate anything, but I still think at some point in your life you’ll buy something that doesn’t turn out as planned. What if the car breaks down? Do you have the money needed to repair it? Use conservative math – not liberal math.
- How much money are we talking here? $10 decisions can be made in a minute. $1,000 decisions ought to require more deliberation, consideration, and prayer.
- If things go wrong, what will it cost me? Sometimes the cost isn’t financial, rather a cost of time.
- What does my spouse think? I know from personal experience that when you make a decision contrary to the desire of your spouse and it goes wrong, it hurts and doesn’t bless your marriage. Do you want anything badly enough that you’d want to risk your relationship with your spouse?
Truth is you’ll probably make dumb choices in your life. Try to make enough smart ones so that your dumb choices don’t push you to the brink of financial ruin.
What smart decisions have you made that helped ‘cover up’ some of your bad decisions?