Practice

Money decision lab

Real money decisions — pay off debt or invest, rent or buy, save or spend — reasoned several ways, with what each way fits and what would change the answer.

Free — no account needed to read

Each case sets out a real decision, the factors that matter and several ways people reason about it. None of them is marked correct: the point is to see what each way fits and what would change the answer for you.

• An unexpected amount arrives — An amount equal to about a month’s income arrives unexpectedly — a bonus, a gift, a refund. Nothing about your regular budget depended on it. What would you do with it, and why?
• A friend asks to borrow money — A close friend asks to borrow an amount that would take you about two months to save. They promise to pay it back in a few months. How would you think it through?
• Pay monthly now, or wait and pay outright? — You want something that costs about a month’s income. The shop offers small monthly payments over two years. You could also save for about four months and pay in full. What would you weigh?
• More pay, longer commute — You are offered a job that pays noticeably more, but the commute would add about two hours a day. How would you decide?
• Pay off debt, or start investing? — You have a steady surplus each month and some debt at a moderate interest rate. You are also curious about investing. Where would the surplus go?
• Family asks for regular support — A family member asks you to send a fixed amount every month for the foreseeable future. It would take a real share of your income. How would you think about it?
• Your income goes up — where does it go? — You get a raise that adds about a tenth to your monthly income. Nothing else in your life changes. Where would the extra go?
• Spend savings on a course that could raise your income? — A course costs about three months of your savings. It could lead to better-paid work, but nothing is certain. How would you decide?