Having options and the ability to make choices can be exciting. Whether you are ordering a specialty coffee or selecting a college there are many different ways to have what we want done our way. Unfortunately, for many people all the choices become overwhelming when it is time to choose just one.

That's the reason why people go years without rebalancing their retirement portfolio, buying a holiday greeting card, or eating at a restaurant where the menu isn't already memorized. Having too many choices causes inaction. Humans freeze up when faced with what appears to be too much information requiring too much thinking. To make matters worse, when a decision is finally made we spend hours suffering from buyers remorse feeling dissatisfied what our choice.

Here are five ways you can deal with choices in life and be sure you making the best decision for you. This process of dealing with choices is called "Filtering".

Filter #1 - Know your objective.

Understand what factors are important to you before attempting to make a decision. If you are shopping for auto insurance, you can help narrow the field by understanding that you are looking for a 12 month policy you can pay for in 12 payments from an A+ rated carrier.

Filter #2 - Use the Rule of Three

The best basis for comparison occurs when you have no more than three things to compare. Trim your possible options to three by throwing out the worst options. Of the choices that made it through Filter #1, reject the ones that are not licensed in your state.

Filter #3 - Understand the Trade-Offs

Say you want to buy a used car and it costs $5000, but you know that in three months the used cars will be reduced 20% for quick sale you can see the trade-off of waiting. By waiting you save $1000, but you lose the driving of the car for six months. If the money pales in comparison to the product, buy it. If you cannot decide what to do, wait a week and see if the money or the product has gained importance to you. If not, continue to Filter #4.

Filter #4 - What is the cost of waiting

Procrastination can be costly, especially in financial matters. Missing the open-enrollment of your company's 401(k) plan could mean you walk away from hundreds of dollars your employer would have matched, resulting in thousands of dollars in lost compound interest over the next 30 years. Focus on what you lose by not making a decision and you might suddenly find it easier to pick between the three options you narrowed the field to earlier.

Filter #5 - Accept "Good Enough"

Not every decision you make will be perfect. Content yourself with making most choices be "good enough" and move on to the next decision. Worrying about always making the perfect choice will result in buyer's remorse and cause unhappiness with your life.

Of course, sometimes you will need help in making decisions. For example, seeking the advice of qualified financial advisors can help you avoid making costly mistakes with your money. So go ahead, order a tall skim amoretto cappuccino instead of your usual grande whole latte. You just might decide it is good enough to enjoy.

Roger Sorensen

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