Top Tips To Avoid Money Mistakes (Part I)
Choice paralysis
Social scientists say too many options paralyzes us as it makes us feel overwhelmed. Write down your goals to minimize such choice paralysis. Prepare a list of wants and needs. Also, try to figure out the criteria with the help of which you can make decisions. Next, weight your options and then make a decision. Try to make informed decisions as risk will be less. The good part here is that some of such decisions are reversible and also some are of low impact.
Anchoring
Similar to the anchors of a ship that keep it moving, the anchoring in behavioral finance represents such point where we evaluate how good all the things are going. Entertain new information to either minimize or prevent anchoring while making decisions.
Bottom like
Avoid making these five mistakes which are common and a natural part of human decision making process. If you are able to understand your financial behaviors, you can easily reduce the mistakes too while making important decisions in career or life. It is true you cannot control the outcomes of your decisions, but at least you can control the process by making good decision.
So, commit today to make good money decisions in future.
