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Critical thinking is a secular term for
wisdom. Most responses to different situations are brought on by
the realization that our actions should be motivated by
forethought and planning and not by chance or the inability to
make a choice. In order for us to have forethought and planning
we need to look at this model and determine the way in which we
should precede in using our money.
First, you must analyze the problem, which
is never limited to one specific issue because life can never be
placed in one box but in many diverse boxes with different
agendas. To add clarity to this first issue, the problem must be
prioritized from a personal level. Everyone has a different set
of priorities.
Second, now that you have identified the
problem look at possible solutions or actions. The wisdom comes
when you evaluate the situation and keep the action that creates
the better long-term effect. Limited or short-term gratification
is often unfulfilling and results in readjustment after a short
period of time and possibility delaying the better outcome.
Third, be willing to change for different
alternatives that may present itself. Businesses, organizations,
and government agencies often change strategies to look for new
and better ways to conduct their business and make it more
productive.
Fourth, appreciate the rewards of
consistency, determination, forethought, and satisfaction when
the outcome is favorable and enjoyable. This is a four-step
critical thinking process: analysis, action, alternatives and
appreciation.
We are going to apply this critical
thinking model to money. Money is never one specific issue. When
we analyze the situation we often think it is the lack of money
which is the problem but in reality that is rarely the problem.
The problem is usually the use of money.
However, if the analysis starts with a
complete lack of funds, the action would be to find a job to
create an income. Alternatives would be using government funds
during the process of looking for a job. These funds only
provide a limited gratification. Of course the alternative
should be short term because it lacks a favorable and enjoyable
outcome. After an income is secured, start the process again
using this outline or model in how to use your money
effectively?
Take a moment and look at
those with money and those without money. People who have money
do not spend money. The comment usually made about people with
money is “They can afford it why don’t they buy it”. The reason
they have money is they know how to use money and not buy
everything. They don’t just buy things because they can afford
it. They buy things because they see a long term reward for
their investment.
There are two extremes. The
first is those who do not attempt to save and those who save but
not with forethought to a receiving a long term reward. For
those who do not attempt to save, they seem to live in the world
of denial. Saving money is not important because they are just
too busy to go to all that trouble. This response is truly
disturbing. This apathetic response creates a constant need for
more money. The desire to make enough money is important and
requires an investment in time but the desire to use it
correctly is overlooked and leads to severe consequences.
On the other hand, those who love to save
but do not have forethought for long term rewards are also in
dire straits. For example, someone has a room full of items and
brags about the savings on these items. They say “I saved 50%
or, 75% or 90% on this”. This response also comes with serious
penalties. The reason the savings don’t matter is because they
must use the merchandise for long term benefit. For example, if
someone buys a Louis Vuitton handbag and saves 50%, what is the
long term benefit?
So we have seen the pendulum swing to the
right and to the left, we have seen those who save and those who
save but with no long term reward or benefit. Since we are only
discussing the purchase of products the third response is those
who encompass the BIG picture and take everything into
consideration when purchasing a product.
We have looked at different
types of individuals and their responses to financing. Now let’s
look at purchasing products for our lives. Our analysis starts
with asking ourselves five questions before we go and spend
money. (Go to Money-Part I)
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