How to Make Wise Decisions

Making wise decisions is a matter of weighing the potential pros and cons of every available outcome. Below you'll find a simple 3-step process to help you make wise decisions no matter what part of your life they may affect.

1) What Do You Stand to Gain?

When you've got more than one option to choose from, a great first question to ask is, "What do I stand to gain from choosing this option?" If the rewards are big, you might be willing to withstand a bit of risk in order to benefit from the opportunity. Conversely, if the payoff would be small, you might not feel so confident about taking a chance right now.

2) What Do You Stand to Lose?

The next question to ask is, "What do I stand to lose if this option doesn't work out?" No one likes to think of the negatives in a potential opportunity, but you could save yourself a lot of heartache with a bit of foresight. If your losses could be huge with a particular option, you might decide to hold off for a while to see if the odds improve over time.

3) What's the Worst Thing that Could Happen?

Finally, take it one step further and ask, "What is the worst thing that could happen if I choose this option, and would I be willing to accept those consequences?" It may seem like a very pessimistic question, but it's extremely effective at clarifying the situation. If you couldn't handle the consequences of making such a choice, then you know immediately that it's not the right choice for you at this time. If, on the other hand, the consequences wouldn’t be so bad, you know it’s a viable option for you.

What do you do if all of your options hold the same potential rewards and consequences? Go with your gut. Take a few minutes to think carefully about each possibility, and then choose the one you feel strongest about.

When it comes right down to it, there are no guarantees in decision-making. You simply weigh the pros and cons, listen to your intuition, and do the best you can. In the end, there really isn’t any such thing as a "bad" decision, because you do learn something from each one you make. If you keep that in mind you should grow more confident with each choice you make, which will help you make even better decisions in the future.