It’s not an easy realization to arrive at, but the outcomes in our lives are usually a result of choices we make about where we are headed. Both conscious and subconscious choices.

This is true also for the outcome in our money lives. However, despite the role that money plays in our lives, more often than not, we are happy to consciously outsource these choices or the decision making to someone else.

There are broadly three aspects to our money life, earnings, saving (and investing) and spending. While we are able to control the first of the three, the other two somehow get influenced by a number of factors external to us and by other people too. If your money decisions are not yours to make, then how can you expect the outcomes to be relevant for you?

One way to approach this is think about what these external influences are and then try to overcome your own insecurity about taking charge of money decisions that impact you.

1. Family and friends who make the decision for you

This is more common than we think. Parents who nudge you to buy a house before you complete 30, or years of seeing relatives buy LIC policies, can result in the same outcome when you begin to think about utilizing savings for wealth creation. This is all well intentioned from the source; however, their understanding of your personal and professional circumstances could be limited. If you are in a job where frequent travel or transfer are inherent to the role, does it make sense to buy a house this early? There is enough awareness today to show that traditional life insurance policies such as those offered by LIC do not grow wealth, the long-term returns, in fact, are dismal. Moreover, there are several avenues today to make simpler, more transparent and flexible, inflation beating investments in products like mutual funds for better long term wealth creation.

Understand your requirement; are you comfortable investing in fixed deposits like others around you, knowing that post inflation adjustment and post-tax returns of your fixed deposit are most likely going to be insufficient? Inflation or annual price rise today stands at 6% whereas one-year fixed deposit rates are at 4.5%, you are really looking at the value of your rupee falling by investing in a fixed deposit.

Don’t make your investment choices based on what others are doing. Look out for your requirements and your ability to take risk. Use your common sense; to grow your wealth, buying a house with 90% loan may not be the one solution that fits all.

2. Advertising and marketing that persuade you against your wishes

Are you convinced that the birth of your child demands you to ‘invest’ immediately in an insurance linked child plan? If the answer is yes, your choice is completely driven by clever advertising rather than your requirement or logic.

If you want to start saving and investing in your child’s name, its best to open a bank account and add long term investment securities like public provident fund and mutual funds.

Investing is not the only space where advertisements have the final say, a lot of your spending or shall we say overspending happens thanks to glossy advertisements. You may not realize it consciously, but the next pair of shoes you are buying is thanks to the pop ups while you browse through Facebook.

Do we really need to change our car every 5 years? Most likely not, but the constant marketing and advertising tempts us to move on to a newer model, sooner rather than later.

Don’t get carried away by glossy advertisements and marketing nudges. Think for yourself what you need to invest in or spend on. Control your urge and impulse by delaying the purchase for a few days, by then you may realize you never needed to make that spend in the first place.

3. Emotions which shouldn’t have a say in money matters

It’s not just other people but our own emotions can interfere in decision making around money matters. Your desire to signal wealth may push you to buy the latest mobile phone model which you can only afford on an EMI. Your child’s best friend’s parents just upgraded their television to a 55-inch LED, you want to do the same. These are all purchases where your spending is motivated by something other than your need and want. It’s emotions like jealousy and envy that push you to make these money choices.

Even while investing one goes through emotions of greed and fear which drive behavior towards whether to buy or sell an investment. Whereas, the reason to buy or sell should be purely driven by your financial goals and objectives.

Make sure you know why you are investing and which financial goal you are addressing through an investment only then will you not be swayed by emotions like greed and fear.

When it comes to having control on your money choices, you have to use your logical left brain a bit more than your emotional right brain. Don’t get carried away by all the noise around you and always question and counter question the decision to ensure that whatever money transaction you make is in your interest rather chasing someone else’s idea of what works for your money life. This doesn’t mean that you don’t spend or even over spend on the things you like, rather make sure that the reason you are overspending is for your satisfaction rather than anything else.

As we get ready to step into a brand new year, resolve to control your money decisions so that the choices bring you satisfaction and the outcomes are relevant to your needs and desires.