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Extension > Family > Financial Capability > Basic Financial Education > Youth and Money > Student Resources > Student Resources for College Students and Young Adults > Four Steps to Sensible Decision-Making

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Student Resources for College Students and Young Adults

Four Steps to Sensible Decision-Making

Joyce Serido, Extension Specialist and Associate Professor — Department of Family Social Science

January 2016

Once you are out on your own, you make many more decisions for yourself, from where to eat, where to live, and how often to exercise. You also make financial decisions on your own. Here is a four-step process for making sensible financial choices:

  1. Start with a goal or a purpose. This means knowing your needs, your values, and your goals, and is a personal and reflective process.
  2. Make sure you have enough information about your options. Gather information from multiple reliable sources.
  3. Evaluate your options. Look at each option to see if it is in line with your goals and values. What are the risks of each choice? What is the possible return?
  4. Make the best choice for YOU. This means making an informed choice that makes sense for your circumstances, and a choice whose consequences you can live.
The more often you practice these four steps when making financial choices, the better able you are to handle unexpected demands and changing circumstances.


Kim, J., LaTaillade, J., & Kim, H (2011). Family process and adolescents’ financial behaviors. Journal of Family Economic Issues, 32 (4), 668-679.

Serido, J., Shim, S., & Tang, C. (2013). A developmental model of financial capability: A framework for promoting a successful transition to adulthood. International Journal of Behavioral Development, 37(4), 287-297.

Xiao, J. J., Chatterjee, S., & Kim, J. (2014). Factors associated with financial independence of young adults. International Journal of Consumer Studies, 38(4), 394-403.

Related resources

Goal-Setting (PDF) — A step-by-step process for setting realistic goals. Includes a Goals Worksheet.

Healthy Decision-Making (PDF) — Ideas for changing your environment to help change your habits.

Be Smart About Your GoalsSmart About Money — Whatever your goals might be, you have a better chance of achieving them if you write them down.

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