Navigating Decision-Making: A Guide to Managing Choice

Financial Autonomy - Blog
Navigating Decision-Making: A Guide to Managing Choice

If you’ve listened to a few of our podcasts, or read our weekly email, you will know that our core theme is helping you Gain Choice in life. This focus came about after working as a financial planner for several years. Particularly in my early years, the bulk of my work was facilitating people moving from the working phase of their life and into retirement. There was a lot of converting superannuation savings into income streams. In order for me to provide useful solutions for these clients I needed clarity from them on when they would retire and how much income they needed. In some cases I’d get people who would be retiring in six months, or even less, making it quite straight forward and clear as to the timing. But for people with longer timeframes until retirement I found that there was a high level of uncertainty. Even people who confidently told me that they would be retiring at some particular point in the future, perhaps as an example age 60, frequently when we arrived at that point, they’d change their mind, deciding that they’re going to stay on another year or two.

It took me a while, but eventually I cottoned on to the fact that rather than asking people for a definitive retirement date, a better way to phrase it was “when would you like to have the choice to retire?” I found that everyone could answer this, and from a planning point of view it provided us with a great reference point to work from.

In time I found that framing most objectives as choices or options worked much better for the reality of peoples lives. You might have goals like a big trip to Europe or a renovation on the house and have in mind that you want to get that done at some particular point in time. But things evolve through life and external factors come into play too. So whilst it might be that you had planned to extend the house this year, for a variety of reasons, maybe higher interest rates or concerns about job security, you might decide to push that back 18 months. Planning around having the choice to do the renovations this year, is a much more human centred approach.

Whilst in my profession, the focus on choice is around financial matters, having choice more broadly in life is recognised as a key ingredient to happiness and overall satisfaction. I’ve been reading recently however about the potential downsides of choice. Where you have too much choice, there is the potential for overwhelm and procrastination which can lead you to do nothing. This paralysis then leads to feelings of failure and/or frustration.

A best-selling book on this subject, The Paradox of Choice – why more is less, observes that our happiness is affected by success or failure in goal attainment. To the extent that too much choice makes the achievement of goals less probable, it’s clearly an undesirable situation.

So we have a conundrum. Our happiness depends on having choice, but having too much choice can make us unhappy. What’s the solution?


Your email application does its best to filter out junk emails. Perhaps it further divides your incoming emails across different folders. Why is this useful? To reduce your overwhelm, and enable you to focus on the things that really matter.

When it comes to choices, the same approach is required. How can you filter that wide range of choices into a smaller subset so that you can make good quality, quick decisions, and move forward?

This filter approach has broad application in life (fast food vs healthy food for instance) but my expertise is in financial planning so I’m going to stick to that realm.

The appropriate filters in the finance realm should be your goals. We often talk about goals here on the podcast, and if you’ve had a chance to read my Financial Autonomy book you’ll know that there is an entire chapter devoted to goal setting and prioritisation. Clarity on your goals is absolutely foundational to a successful financial planning strategy.

Let’s consider an example of a fictional client using common goals that clients share with me.

Jane has three goals. In order of priority they are:

  1. Get some renovations done around the house this year. The budget is $10,000.
  2. Have a trip to Italy next year with a budget of $15,000.
  3. Have the option to retire at age 60 on $85,000 per year of income in today’s dollars.

Jane is successful in her profession and so earns a strong six figure income and has a meaningful savings capacity. This provides her with the potential for considerable choice. On the weekend Jane is out with a friend who takes her for a ride in his brand new convertible Mercedes. He tells her it only costs him $2000 a month to lease, an amount Jane could certainly fit into her savings capacity.

Jane loves the experience and so begins to wonder whether she should buy a convertible Mercedes of her own. She reaches out to me as her financial planner to get my thoughts.

Our starting point is to apply the filter of her goals. Does buying this car align with the goals that we are working to? In this case the answer is a clear no.

The next step is to consider whether buying this car should be a new goal. Peoples goals change all the time, they are certainly not set in concrete, so adding new goals is certainly something that happens on a fairly regular basis. Jane answers with a tentative yes to this becoming a new goal but only if the existing three goals can definitely be achieved.

Perfect, from here we can do some modelling. We’ve already modelled and have a plan in place to ensure that her three goals, the renovation, the trip to Italy, and the option to retire at 60, are all on track to be achieved. So how does that alter if $2,000 a month goes out the door for a vehicle lease?

We crunched the numbers and determined that leasing this car would jeopardise her retirement goal. Jane’s choice then becomes having the option to retire at 60 and not buying the car, or buying the car and changing her retirement goal to having the option of retirement at age 61.

By filtering Jane’s choice through her goials, she’s able to make a rational and informed decision.

The example here is of a large expense but we’re all faced with choices on a regular basis. Do we have dinner at home or go out for a nice restaurant meal? Do we book a local holiday or jump on a plane to Europe instead?

Choices, they are endless. Clarity on your goals might help you quickly discard most, so you can enjoy life focused on the things that matter to you.

You’ve probably seen the idea of classifying an opportunity as either hell yeah, or no. The opportunity is something that really gets you fired up and excited, or else you turn it down. In a similar vein there is the observation that in saying yes to one thing you are inevitably saying no to something else. Buying that new lounge suite means that you now can’t spend that money on a holiday. Both these approaches are complementary as filters in narrowing down your choices and are great add-ons to my suggested core approach of starting with clear goals in mind.

Having choice is great, definitely something we all want to work towards, but recognise that too much choice has downsides. We need the ability to quickly filter out the bulk of the choices we are presented with so that we can spend time considering only those that will produce the happiness we all seek and deserve.

Thanks for listening, look out for the GainingCHOICE email on Friday morning, and we’ll be back with the next podcast episode on Wednesday.

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