How to Make a Good Money Decision When Your Heart Says Yes and Your Wallet Says No.

My coaching client (also a coach) was grappling with a money dilemma.

She wanted to enroll in a $5,000 certification program offered by a coach she loved. But she’d already invested more than $25,000 in coaching training, and while her practice was growing, it was only just starting to make money. She’d sworn not to spend more of her family’s nest egg until her business was more profitable. 

She was torn between desire and reality.

Not every money decision you make has to be perfectly rational or make sense on paper. There is a process you can work through to be at peace with whatever decision you make. 

There’s no need to justify “unwise” money choices by heaping justifications and rationalizations just because you’re in denial or unsure about what you truly want.

Don’t gaslight yourself.

Say you want to fly business class on a long trip, but the airfare would wipe out your profits for the quarter. You justify your desire by saying you’ll be thousands of dollars more productive because you’re comfortable on a long flight. That productivity will, in turn, goose profits, so the ticket is a good investment.

Is that true, though?

If you just sit with why you want to fly business class, you might uncover that you’re frustrated with the pace of growth in your business. You might realize that you are burnt out and need a break. You might want to be shown a little love, even if you have to buy it.

And then the coolest thing happens:
When you stop bullshitting yourself, you become immune to all B.S.

Filtering out the emotion will allow you to make the financial calculation easily. And if you make a decision that considers more than just the economic calculation, you won’t need any justification, rationalization, or over-explanation. 

That feels honest.

You can decide to spend the money because you WANT to, and you’re clear-eyed about the consequences. 

Or you may choose that short-term comfort isn’t worth the longer-lived extra work you need to pay for it or the longer-term stress of being short on cash.

Either is fine.

Clarity and a little math will make the coach vs. business class decision easy.

You already possess this decision-making skill.

When you’re at the supermarket trying to decide which box of laundry soap to buy (the big one or the small one), you’re engaging your money brain. What do you value? Lowest price per unit or smallest total dollars spent?  

You're making a financial decision when you decide whether to buy that rotisserie chicken or roast your own. You’re incorporating the value of your time and energy, as well as the cost per pound.

When you decide whether to spend 10 hours knitting a hat or $20 buying one, you’re making a money decision. Which would show more love to the recipient? Which would take better care of you?

All of those decisions are not just about the money. 

There are things other than money you’re taking into account. Because the stakes are low and it’s not an emotionally fraught decision, you can easily separate the strictly financial part from the emotional aspect of the decision. There’s no confusion, ambivalence, or agita.

You can also do this for big money decisions you’re agonizing over.

Use the Spending Clarity Questionnaire below to evaluate whether a business investment makes commercial sense.

Answer five simple questions, do a little math, and you’ll have the financial solution to your money quandary. Once you know what the numbers say, you can sort out the feelings part of the equation and make a decision you’re happy with.

How long/what will it take to earn my money back?

Always do the math. Translate the theoretical into the concrete. Your calculator is your BFF when it comes to money decisions because knowing the truth will set you free.

You may decide you don’t care that you won’t make that money back.

That is 100% OK. 

But you’ll want to own and accept that wholly, or you’ll have doubts, regrets, or self-loathing.

If your feelings are acknowledged and your outcomes calculated, you’ll feel grounded and have peace of mind about your decision.

Otherwise, your soul is dancing the Hustle to a Polka beat.

What is my return on that investment? (ROI)

If you own a donut shop and buy a donut-making machine, it’s easy to calculate the return on that investment (i.e., the profits on the extra donuts you can make divided by the cost of the machine).

It’s harder to calculate ROI when it’s an investment in training, even for something as clear-cut as medical school (if you’re curious, here’s what I mean).

In my client’s case, it’s even harder to calculate how much the certification would add to her value as a coach, given that it’s not a set curriculum like medicine.

How much more money will she make because she spent $5,000? Will it bring more clients? Will it allow her to charge a premium? Would she be a $5,000 better coach than she is now? These are all good questions to ask.

What’s my opportunity cost?

What return could I earn with that money instead? What am I sacrificing by investing in this training? Could I get more bang for my buck elsewhere? 

For example, would my client be better off spending that money on ads or hiring someone to teach her a specific skill she needs to build her business (e.g., copywriting)? 

What’s the range of outcomes?

What does 100% success look like? 20% success? When is it not worth it?

What’s the probability that the promised results will occur? If it’s low, would you still want to do it?

Don’t look for precise answers here. A good rule of thumb is the fewer data you have, the more you haircut the odds.

Exercise your good judgment as tempered by your experience.

To whom do the benefits accrue?

Always follow the money.

If the transaction benefits the other party financially more than you, PAY ATTENTION. You need to define what would a fair exchange look like for you when you include the intangible benefits.

Fairness depends on VALUE, not just DOLLARS.

Dollars are easy to calculate, but value is not.

So get clear on what getting full value would look like to you. And yes, only you get to define the “value” of value.

You get to want what you want.

You get to spend money guilt-free. 

Sorting out your feelings from the math will help you feel better about your decision and get whatever return you want, emotional or financial.

Because if you don’t separate your emotions from the financial decision, you might spend the money, but your warring inner selves will prevent you from getting the full benefit and enjoyment.

Trust yourself to make the right decision for yourself.

See financial reality for what it is and also accept your deepest longings for what they are. 

If you do that, whichever “side” (desire vs. reality) you pick, you will feel grounded, powerful, and at peace.