It started out as a reminder to my middle-aged tennis playing self…

Don’t get hurt.

After all, I’m not the young man I used to be and want to prioritize my ongoing health over any delusions of future tennis grandeur. And yet, the more I’ve practiced this mantra around my slowly declining tennis game, the more I’ve come to appreciate it as a helpful guide well beyond the tennis court.

Whenever you have a big decision to make that will impact your future financial self, it can help to first ask…

How can I get hurt here?

This question allows you to test your initial inclination against a range of imaginable possibilities.

For example, I’m hearing from more people lately that their cash cushion isn’t earning as much as it was over the past few years. And they feel like they need to do something to earn more. So let’s ask the question…

How can I get hurt here?

Well, for one, chasing higher yields or returns means taking on more risk and introducing more fluctuations along the way. 

Is that something you’re willing to reduce your cash cushion in order to do? 

Because remember, the furnace you need to fix or roof you need to replace won’t care if your investments are down in value when you need to sell them to pay for those repairs.

Another example could be deciding whether or not to move to a bigger house. So let’s ask the question again…

How can I get hurt here?

Before you double your current monthly mortgage payment, have you looked at how it would impact your overall cash flow? For example, does the bigger house require both of your incomes to make it work whereas your current place only requires one? And what is left in your cash flow for everything else after making the new monthly payment? Is the tradeoff worth it?

Of course, sometimes the best overall decision won’t be the best financial decision. 

But by asking yourself “how can I get hurt here?” first, you can make those bigger, more impactful life decisions with as much financial comfort and clarity as possible. And that’s the best any of us can really do in an always uncertain world.