|Type of paper:||Essay|
|Categories:||Finance Problem solving Systems thinking|
Decision-making is a successful process if the five-step model of critical thinking is observed. The first step to solving a problem is the identification of the problem. Once one is aware of the problems he/she is facing, then its source can be identified. Later on, the options of the solution and evaluation of those solutions are considered. Lastly, one makes a final decision and modify it with time to establish that person's goals (Hannel et.al, 1998).
Problem identification step
Many people define success by financial stability. Unfortunately, financial management is a problem that is faced by many individuals. By the end of a month, people often find themselves behind their budget and broke. Many others are usually in debt and eagerly waiting for their salary to settle the debts. Handling money can be very frustrating if one finds himself without the finances to fund their plans. Therefore, one should observe the sources of the problems carefully and come up with ways of attaining financial stability (Sternberg, 1986).
What are the causes of financial problems
There are reasons as to why people find themselves without money by the middle of the month. They range from one buying items that are too expensive or moving out of home or even having a job that does not pay well. In my case, the biggest problem is buying things of a particular brand which at times turn out to be very expensive (Sternberg, 1986). Another issue is impulse buying where I tend to buy fashionable clothes that I had not planned to purchase. It is hard to control my expenditure, especially when visiting the mall. I always find all the things that I need but had not included in my shopping list.
Identifying options in problem solving
However, since I have identified the problem and causes, the next step is to explore the available options that I have to solve the problem (Hannel et.al, 1998). The first step is to stop spending on things that are not important. This means cutting down on snacks and fancy clothes. The designer clothes and perfume are things I will have to compromise until I get a better and more stable job where I can sustain my expenditure. Moreover, I will start shopping with cash instead of a credit card which makes it easier to track my expenses.
Generating alternatives in problem solving
Another way of managing my expenses is by replacing my huge expenses with other things. Instead of buying expensive clothes and designer perfumes, I can consider cheaper clothes which are still fashionable. Secondly, I will spend less on snack which I seem never to have enough of and start eating fruits which eventually turn out to be cheaper. Apart from that, I will start making a comprehensive shopping list before going for shopping and ensure I only carry enough cash and not more. Most importantly, I have made a plan to identify my financial priorities which are providing for basic needs rather than spending on useless things (Sternberg, 1986).
I know that the best way to manage finances is making a budget to prevent me from further problems (Hannel et.al, 1998). In this way, I won't have to borrow money since I have overspent on things that were not necessary. I need to plan my money on what goes to food and what is for clothes, rent, and other things. The next action is making a plan on how to pay off my debts to ensure my financial freedom. Lastly, am going to seek help from my friends and other people on how to manage finances as I have a weakness when it comes to being disciplined in following my budget.
Hannel, G. I., & Hannel, L. (1998). The seven steps to critical thinking: a practical application of critical thinking skills. NASSP bulletin, 82(598), 87-93.
Sternberg, R. J. (1986). Critical Thinking: Its Nature, Measurement, and Improvement.
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