Financial decisions can be a surefire way to completely paralyze us. Even small financial decisions can be intimidating. So, when we’re faced with a major financial decision, the stress compounds. We’re often stuck feeling, well, stuck – and a little trapped.

Does this sound like you?

If you’re facing a major financial decision, you’re not alone. You’re going to face many of these big decisions throughout your life. It’s part of growing both personally and professionally and as you grow, the financial decisions you have to make will likely become more complicated and overwhelming.

Luckily, you can take some of the stress out of these scenarios by running through a list of questions before making a call one way or another. Although this practice won’t completely get rid of the stress you’re feeling, it should make the decision process much more manageable for you and your spouse or partner.

What Qualifies as a “Major” Financial Decision?

First let’s talk about what qualifies as a “major” financial decision. Some money decisions are easy to get hung up on, but don’t have that big of an impact on our lives. To help you eliminate some decision fatigue, set some “money rules” up for you and your spouse or partner. These can include:

  • How much budgeted, discretionary money you can spend without feeling guilty or checking in with anyone
  • What your budget is each month
  • What goals you’re working toward
  • What general spending guidelines you want to stick to (ex: you want to spend money on experiences, not things, whenever possible)

With these smaller money rules in place, you’ll be able to get through the day-to-day without stressing out too much over financial decisions. However, that doesn’t mean that major decisions won’t come up!

These might be decisions about buying a home or relocating, changing jobs or career paths, whether you want to purchase a new car, what college your kids can afford to attend (and how much you’ll financially support them) – just to name a few. Major financial decisions will have an impact on your immediate future, but they’ll also have a big impact on your long-term goals and the vision you have for your life.

With that being said, let’s dive into what questions you can ask yourself before making a major financial decision.

Is This Decision Within My Means?

Making a major financial decision out of left field usually isn’t a good idea. In other words, don’t quit your job, buy a new house, lease a new car, or move across the country without thinking about it (and budgeting for it) first. Even after you’ve budgeted for life’s major financial decisions, it’s still worth weighing the pros and cons. Your first step should always be to check yourself: Is this decision actually within my means? Or do I want this because it’ll provide instant gratification?

How Will This Decision Impact My Immediate Future?

You make plenty of money decisions every day that impact your immediate future. Buying dinner out with friends might mean one less date night next week. Sending your kids to summer camp might mean that you skip our annual family vacation to the beach before they go back to school. Everything comes with a tradeoff, but major financial decisions will have a bigger impact on your immediate financial future.

For example, if you’re thinking about buying a house, how will that impact your immediate future? Your down payment may lower your total savings, which could be a problem if you haven’t saved enough to cover both your down payment and potential emergencies (like broken water pipes, or having your kids break their arm climbing the tree in your new backyard). Make sure you know what your immediate future will look like if you make this decision, and that you aren’t jeopardizing you or your family’s security as a result.

How Will This Decision Impact My Long-Term Future?

Our small money decisions don’t make or break our long-term. Grabbing a salad for lunch that’s within your budget at a local deli isn’t going to completely derail your debt repayment strategy. Major financial decisions, on the other hand, will. If you choose to start your own business and leave your cushy-but-demoralizing 9-5 job, you’re giving up a lot of financial security in the short-term.

But you could be tapping into a more unlimited stream of income and growth opportunities that lead to more financial growth in the future. Have a very clear idea about how this choice impacts your long-term, regardless of which way you decide to go.

Why Do I Feel Motivated (Or Unmotivated) To Make This Decision?

Knowing the “why” behind your motivations can help you to gain clarity around whether or not this decision is best for you and your family. For example, let’s say you recently applied for (and landed!) a cool new job in your hometown. After living away for years, you’re ready to live near family again as you and your spouse are thinking about having kids and buying a home. Before you take that job, be honest with yourself: Is this opportunity really better than your current situation? Or are you motivated because you’re feeling desperate to move home? The job might actually be an awesome opportunity, in which case, go for it! But if you think you can find another, better opportunity for you and your career, consider continuing to apply and interview for a few more months. Don’t be afraid to take your time.

On the other side of the coin, you may be feeling unmotivated to make a major financial decision. Maybe you don’t want to downsize now that the kids have moved to college, even though there are a lot of cute housing options for you and your spouse in your area, and there are some concrete financial benefits. Are you unmotivated to downsize because moving doesn’t make financial sense? Or is it because you feel attached to the house your kids grew up in?

Remember – there’s no wrong answer! Whether you’re motivated or not, don’t shame yourself for how you feel. Just acknowledge those feelings as you make your decision, and understand how they’re impacting you.

Who Else Will This Decision Impact?

You don’t live in a vacuum. The major financial decisions you make will impact you, but they’ll also impact your partner or spouse, kids, family, friends, coworkers – and more. It can be helpful to think through who your decision will impact, and who needs to be part of a “stakeholders” conversation about your choice. We rarely think of the people in our lives as stakeholders – but that’s who they are! Deciding ahead of time who matters to you when making a financial decision, and bringing them into the conversation, can help to get you out of your own head.

Just remember, not everyone that the decision will impact needs to have a say. If you’re miserable at work, talking to a coworker who you like, but who wants you to stay put to make their own lives easier, is not a stakeholder in your decision. Likewise, your mom, who wants you to leave your miserable job to move your family closer to her, is also not a stakeholder. Both of these people have a vested interest in your choice, but they’re not on your VIP stakeholders list. Your spouse and kids, on the other hand, who may have to relocate or adjust to your new schedule, can be considered stakeholders.

Will This Decision Move Me Toward the Life I Want?

This is the biggest question to ask yourself before making a major financial decision. Think about the life you want for yourself, and for your family. Is this moving you toward that life? Or away from it? Even if a decision seems like it will help in the short term, it may not be a good long-term fit according to your lifestyle goals or values. Don’t be afraid to walk away from new, shiny opportunities if they won’t move the needle toward what you’re working for.

Need some help? Having an impartial third-party walk you through the consequences (good and bad!) of your decision before you take the leap can be a game changer. As a fee-only financial planner, a big part of my job is to act as a sounding board and an objective truth-speaker to help people make empowered decisions about their lives. Want to know more? Let’s talk about how teaming up with a financial planner can help you to start making confident major financial decisions.