What would you do if you are faced with a money choice? Let’s say you have a certain amount of surplus which has come thanks to a windfall inheritance. You can either use it as a down payment for your own home which you want to move to once you retire in two years or you can use it to send your daughter overseas for under-graduation studies in a course she has earmarked for years, but until now felt was unaffordable. Which one would you choose?

What would you do if, you received this year’s bonus and your younger brother asks for a loan to set up his fifth venture, after the previous four have failed and post COVID you are now very focused on trying to build that emergency fund you know you should have before any other investment or money commitment is fulfilled?

The choice you make with your money will shape the course of the rest of your life, partially or in entirety depending on the gravity of the decision and situation.

Money choices begin with small things; to order in take-out for the third time this week or save that money, to get your house repainted and furniture reupholstered in this year or save and do it after another year, to buy the latest iPhone model or use the money for the children in the neighbourhood orphanage.

Your choices have the power to satisfy you or add to your anxiety. These are the big and small money battles that you are likely to face on a daily basis.

How can you make the choice that optimally represents who you are and gives you some satisfaction? To come as close to this outcome as possible, here are some questions you can ask yourself whenever you are faced with a difficult money choice.

1. Do either of the options require a change in behaviour

Let’s say, the choice is whether you will loan the money to your brother or use it for your house. If you have already been lending your brother money for all the previous venture, will this next loan make you demand more accountability from him, outright or expected? As a result of the change in your behaviour, is it possible that your behaviour towards him will change? Is this a welcome change?

Once you start considering the impact of the choices on your personal well-being, behaviour and how you interact with others, the feasibility of each choice becomes apparent.

While the choice is about money, what is more, important is the impact this is likely to have on you emotionally and also the practical impact on your life.

2. Is this choice going to affect your financial future

This is the second layer of questioning. While the choice to order one more take out within the week may not appear to impact your financial future immediately, the habit to eat out can become the big cost item that you need to budget over time. What about the choice to pay down-payment on a house versus sending your child overseas? That’s one choice that can surely impact your future financial security. In such dilemas, it is more than acceptable to lean towards the choice that has the least negative impact on your financial future.

It is a given that at some stage our current earnings will slow down and we will rely more on passive income. When that happens, you need to be prepared with an adequate financial cushion. Without this cushion, financial distress may be imperative. If any of the options in front of you are depleting this cushion or have the potential to do so, then you need to think through carefully on whether that’s the choice you want to make.

3. Are you compromising your inner values

Our inner values are the guide we have which holds us true to the path we walk on. In the money choice you are making, ensure that those values are not compromised. You buy an expensive watch as a gift for your spouse, the store keeper mistakenly charges you an amount which has one zero left out from the tail. The store has not noticed this mistake, but you have – what will you do, inform them of the error or walk away with a cool, unexpected discount? How will you feel when you go home and recount the events to the spouse whose gift you bought? Will you have the courage to narrate this story to others? In the initial days of COVID lockdown, when your household staff could not come to work and one of them asks you to not stop their salary because she is the only earning member and her family will go hungry, will you agree to pay her half the salary or continue with the entire amount regardless of whether she is able to return to work? What if she owes you an advance you lent her six months ago, will you continue to deduct a partial amount if you pay her now (during the lockdown)?

There are no easy answers to some of these money battles and dilemmas, on the one hand there is a calculation and on the other hand there is peace of mind.

Peace of mind is best achieved when you don’t compromise on your inner values.

Do a quick value check and avoid the option which will keep you awake at night.

Money battles can be big and small, expected and spontaneous, personal and professional, whatever the battle, you will have to make a choice. Ensure that the money choice you make is the one that resonates most with who you are as a person and does not jeopardize your own money situation now and in future.