Featured, Financial Psychology, Personal Finance

The 10/10/10 Test For Financial Decision Making

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The 10/10/10 test is this. Ask yourself how you will feel about your decision:

10 minutes from now.

10 months from now.

10 years from now.

Funnily, my friend first told me about this type of thinking framework when I was going through my first breakup! It’s really magical for thinking about our decisions, dilemmas, and current circumstances. It applies to all areas of life!

But I think it’s also been hugely helpful for making big and small financial decisions in the here and now. Not only does it solidify our subtle beliefs into words we vaguely think but don’t say out loud, it also reframes everything into a long term perspective, which is great when it comes to our finances!

I’ve wanted a car really badly for a year or so now. But having just exited my fruitful period of unemployment, I’m rebuilding my net worth and making up for lost time. I’m trying to set the foundation for my 401k, IRA, brokerage accounts, emergency savings, and pay my parents back for the program I attended before I buy a used car in full. I could afford a cheaper, older car with more mileage today, but I know:

10 minutes from now: I’m gonna feel elated!

10 months from now: I’m likely to feel annoyed/regretful from biting the bullet on a high mileage car that might have other issues I’ve had to sink my money into already…

10 years from now: I probably won’t even have this car anymore because I already doubt today it will last me beyond 5 years.

Evaluating just these 3 timeframes launches my thought process into how Present Me and Future Me will feel. These same assessments can be made when shopping, deciding how much to save, eating out, prioritizing paying down debt, taking an expensive trip…etc

Give it a try next time!

Do you have any questions you always ask yourself before a financial decision?

Do you have any cool financial psychology hacks?

Jing is currently a software engineer based in Oakland, CA. She left her job in New York, moved to San Francisco unemployed, and more than doubled her salary in 4 months.

7 thoughts on “The 10/10/10 Test For Financial Decision Making

  1. I like these “short and sweet” strategies to help decision making (especially when it comes to spending/savings!). This is a good one, I like how it considers several points in time. I think I’ll try this the next time I’m tempted to grab that impulse buy!

    1. It’s shockingly helpful how a simple trick can just start your brain on a more concrete train of thinking! I definitely use this one the most for impulse purchases 😛 Thanks for stopping by Mrs. Adventure Rich!

  2. Hello Jing,
    very helpful. On the other hand, if you are in real (legitimate) need of a car, it will be really difficult to have the same car in 10 years. If not impossible.

    1. Aw man, I thought 10 years was a realistic time frame. I may have to rethink this 🙁 I was hoping to use a car more for quick errands and long weekend road trip type things instead of daily commuting, but I’ll definitely have to do a lot more research before I bite the bullet!

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