Asking yourself great questions can help you break habitual thought patterns and discover new ways to get the results you’ve been looking for. I’m a firm believer that this is one of the best ways to upgrade your thinking.t
That’s why I keep a running list of powerful questions. They’ve helped me in all areas of my life — from understanding what’s really important to me, to reducing my stress, to making better financial decisions.
It’s not always easy to ask and answer these questions honestly. Sometimes it means admitting that you made a mistake, or that you failed, or even that you’re failing now.
But if you’re willing to take a good long look in the mirror, asking them can help you get back on the right track — or do even better if you’re already on it.
Here’s a list of eight powerful personal finance questions that can lead to positive change in your life.
#1. What would you not do if you could go back in time?
The first question on this list is one I learned from Brian Tracy, which he calls zero-based thinking. He says to ask yourself:
“Is there anything in my life, knowing what I now know, that I would not start up again today if I had to do it over?”
If the answer is “yes,” then you know it’s time to make a change. You don’t have to let your future be limited by the decisions you’ve made in the past.
If you started a business and it’s not working out, don’t be afraid to cut your losses and start over. If you’re working in a career and you hate it, find a different one.
I know that these things are much easier said than done. But with planning and effort, they’re possible. The first step is being honest with yourself about the answer to this question.
#2. When is your financial independence day?
Tracking your net worth is fun. But knowing your financial independence day — which is the day you no longer have to earn income — can be an even more powerful motivator.
This number is an indicator of your entire financial picture: your assets, liabilities, income and expenses — the whole enchilada.
The simplest way to find this number is by using Personal Capital’s free retirement calculator.
You can read more about how it works in my review of the platform, but the short explanation is that it links all of your financial accounts and then uses artificial intelligence to run a series of simulations that help you determine when you can actually retire.
This is more than just informative. If you care about retiring early, you need to see if you’re on the right track. If you’re not, you’ll make more progress by adjusting your savings and investment strategy sooner rather than later.
The same idea can be applied no matter your financial situation. For example, if your top financial goal is paying off debt, it’s helpful to identify your “debt free date” and track your progress, making adjustments along the way.
Related reading: Figure out how long your money will last during retirement.
#3. What would you do if you had $10 million in the bank?
It’s easy to think that more money is the solution to every problem. But when it comes down to it, much of our happiness is derived from things that are cheap or free.
So ask yourself: if you had $10 million in the bank, what would your ideal week look like (and what would it cost)?
That $10 million figure isn’t random. It’s chosen because it’s big enough to give you financial independence, but not so big that it untethers you from reality.
For example, the exercise would be much different if I said, “what would you do if you had $100 million in the bank.” Your answer might be, “buy a yacht and spend the rest of my life sailing around Greece.”
I can’t fault you for that answer, but the point of this exercise isn’t to fantasize about having all the money you’d ever want; it’s to give your mind the space to think about what really matters to you, without the constraints of your everyday financial stress — all the bills and the budgets and the obligations that are constantly weighing you down.
You may find that you don’t actually need $10 million to live your ideal life. And once you identify more concretely what that looks like, you can start thinking about what it would take to make that vision a reality.
#4. If you lost your entire income tomorrow, what would you do to start earning money fast?
Sometimes you may need to take a risk in your career — to step out on a ledge and take a leap of faith that you’re not sure will work out.
We often think these situations are make or break moments in our lives; that these risks are either massive successes or total busts. Most of the time that’s not the case, and what feels like the end of the world doesn’t actually take that long to recover from.
But there’s a danger that’s bigger than trying and failing, and that’s not trying at all.
Often, you’ll only get a few chances in your professional life to seize the moment. To take a job that requires you to move across the country, or to start a business that you really believe in.
If you feel like the risks are too great, you may not act on those opportunities. And you’ll probably make less money and have less professional growth as a result.
That’s why you should always have a plan in place for the worst-case scenario; a backup plan that you know you can put into action to ride out the worst of the storm.
#5. What would you do if you weren’t afraid of failure?
Often, we limit our goals because we’re afraid of failing; we set goals that are inside our circle of competence — goals that don’t force us to stretch beyond our comfort zone. And this sometimes means we’re not actually pursuing our ideal outcomes.
That’s part of why it’s so important to have a plan for a worst-case scenario. Knowing that failure isn’t the end of the world frees you up to think about what you really want to be doing.
So ask yourself what you would do differently today if the potential for failure wasn’t part of the equation. And then ask yourself what steps you would need to take to make that a reality.
#6. What will happen if you stick with your current habits?
All of the questions above relate to changing your behavior, mindset and habits. And sometimes, it can be helpful to think about those things from a different perspective.
Instead of just asking yourself how you want things to be different, think about what will happen if you stay on exactly the track you’re on right now (and if you’d ultimately be happy with those results).
This works on a practical level when it comes to things like your savings rate. If you keep setting aside your current amount per year, will you be satisfied with your retirement account when that day finally arrives?
But it also works with bigger-picture questions like your career trajectory. If you stay in your current lane and keep making the same types of decisions, will you be happy with the result five, 10 or 15 years down the line?
If the answer is “no,” then you know it’s time to make a change.
#7. What big expenses are on your five-year horizon, and how can you start planning for them?
We all have to deal with financial emergencies — things like unexpected medical bills, a surprise job loss, or having to travel to attend a family funeral. It’s hard, if not impossible, to plan for these things. That’s why you have an emergency fund.
But too often, people fail to adequately plan for known future expenses. This includes things like buying a new car when your current one has 200,000 miles on it, or paying for a wedding when you’ve been in a committed relationship for two years.
Planning for these expenses helps you avoid tapping into your emergency fund, taking on debt, or delaying important decisions.
#8. What do you own that you wouldn’t buy for its current market value?
Most of us own things that we don’t need or use. Often, those assets can be sold, in turn giving you an injection of funds to apply towards your financial goals.
It can be hard to let go of our possessions, but asking this simple question can take emotion and attachment out of the equation.
If you wouldn’t buy the item for what it’s worth, sell it!
Almost everything depreciates in value over time, so if you regret your decision later, chances are that you can repurchase the item for less than you sold it for.
Liquidating idle assets can be one of the quickest and most effective ways to jolt your finances into shape, giving your more space to make the desired changes you’ve identified by asking the other questions on this list.
The Best Personal Finance Questions
There are an infinite number of great personal finance questions you can ask yourself to become more fiscally responsible. But if you read this whole article, you probably noticed that the eight questions on this list all have one thing in common: they challenge you to take an honest — and sometimes uncomfortable — look at your habits, beliefs and behaviors.
In my opinion, this type of candid self-evaluation is one of the keys to personal and professional growth. That’s because it’s easy to coast; to turn on the cruise control and just take things as they come, thinking you’ll get around to making important changes in due time.
But as the band Smashmouth famously said, “the days keep coming, and they don’t stop coming.” Time goes by in the blink of an eye — especially when spouses and kids start coming into the picture.
Asking yourself these tough questions today forces you to take a realistic look at your relationship with your money and your work. And that gives you the opportunity to make changes sooner rather than later.wor