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Money decisions


Our financial decisions aren’t purely financial. Like ordinary consumer purchases, financial choices have three benefits: utilitarian (what it does for me), expressive (what it says about me) and emotional (how it makes me feel). As we manage our finances, we need to be aware of these three components when making any money-linked decisions.

For example, let's use buying a top of the range car like a Tesla Model X which costs around £100k.

What does it do for me? It gets me from a to b

What does it say about me? It shows I have the capital or income to buy such a car, so shows the world I am doing well. It also says I care about the planet as I am driving an electric car

How does it make me feel? I feel good about myself, I feel successful and confident.


Now let's use a 1 year old Volvo XC40, which can vary between £45-50k.

What does it do for me? it gets me from a to b

What does it say about me? It says I care a lot about the planet as I am driving an electric car

How does it make me feel? I feel really pleased with my purchase as I know my car is reliable and it should save me money in the long run


I am not saying either of these are right or wrong. What I am getting at is which person are you? Knowing this is extremely important for your financial planning as to have a successful plan, it is not about how much money you earn but how much you keep that makes you successful.


What I have learned and my own test is to ask myself the following question: If you couldn't tell anybody, post it anywhere, would you still want to do it/buy it?


Then I can know if I am doing it for the right reasons as I am more concerned with utility and emotional aspects of how I use my money.

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