1. STOP & THINK – You should always think carefully about any decision, especially an important financial decision. You never want to feel pressured into making a deal. If someone is trying to pressure you into a decision, there is a good chance that it’s not as good as it may seem. Stopping to think about it will only re-enforce any benefits from proceeding. Consulting with a friend, family member, or financial professional before making a decision may be very beneficial.
2. ASK QUESTIONS – Don’t be afraid to ask questions about the costs and risks associated with different types of accounts or investments. You need to know what you are paying for. Don’t make a decision if you have any unanswered questions; make sure you understand everything before saying yes or no.
3. VERIFY INFORMATION – After all of your questions have been answered, verify the new information. Conduct research on you own to double check the answers you received to make sure what you have been told is accurate. An advisor or salesman might be misinformed on the topic or may try to mislead you to get a sale or investment. Do some comparison shopping. For example, if you are planning to get a credit card, compare the different interest rates and fees to determine total potential expenses.
4. ESTIMATE COSTS – After you have carefully considered your options, attempt to estimate the total cost associated with your decision. There are many calculators and tools available on the internet that can help compare almost any product or service. First calculate the fees and expenses you have to pay upfront, then, if you are making a longer term decision, add in any ongoing payments or charges. After you have totaled everything up, the value of the decision should be clear.
5. MAKE DECISIONS – After you have asked all your questions, verified those answers, and estimated all the associated costs, you should feel confident making your decision.
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