Financial Literacy: Choices, Comparison Shopping, and Decision Making Overview


Let’s start with Choices.  Choice is the opportunity to select (or choose) one thing over another.

How many choices will you make today?  Start with whether you will get up when the alarm goes off in the morning or whether you’ll hit the snooze button – one time, maybe twice, or even three times before finally getting out of bed.  What are you going to wear?  Which shoes, pants, shirt, and underwear will you select?

What will you have for breakfast?  If you opt for eggs, will you choose sunny side up, scrambled, fried hard or soft boiled.  Eggs, not for you?  What cereal will you choose?  With or without fruit or sugar?  What kind of milk? – there are six primary types of milk today, from dairy to soy, to cashew.   Will you have coffee, tea, or juice?  Are you going to talk with someone while eating?  Read?  Watch TV?  Or simply enjoy the quiet of the morning?   Researchers at Cornell University state that we make 226 choices over breakfast alone.

So back to the original question – how many choices do you think you’ll make today? Hundreds? Thousands? It’s estimated that the average adult makes about 35,000 remotely conscious decisions each day. Each decision, of course, carries certain consequences with it that are good or bad.

In our country, we are blest to have multiple choices in life about

  • what to eat
  • what to wear
  • what to purchase
  • what we believe
  • what jobs and career choices we will pursue
  • how we vote
  • who to spend our time with
  • who we will date and possibly marry
  • what we say and how we say it
  • whether or not we would like to have children
  • who we will go to for medical and dental care
  • who our children spend their time with
  • what they will eat, what school they will attend, etc.
  • where we live

Having this ability to choose is incredible and exciting, as well as an obligation to use these choices well.

Choices compound – that means they build on one another to become more important than we think.  Let’s take a simple example of spending habits on meals.  The only one we impact is ourselves, right?  Maybe!  Over the long run, if we do not make healthy or financially wise choices, those seemingly minor choices could have life time consequences.

Here’s a simple example:

  • Having meals delivered from our favorite restaurants daily is convenient, fun, and satisfying. But the service and delivery costs add up, so we have less to spend on other necessities, including saving for emergencies.
  • If we eat fast food often (after all, it’s cheap), we may become less healthy, and prone to illness in the future – like high blood pressure, diabetes, heart disease, stroke, and a whole lot more.

These seemingly simple choices can negatively impact our families and even society in the future.  Investing the money we save on service fees and delivery costs can help us become financially independent.  Making poor health choices now can make us more dependent, physically and financially, on others as we grow older

For fun, when this presentation is over, start paying attention and count all the choices you make through the end of they day.  10,000?  20,000?  The first one will be choosing to try to count your choices.  This can be fun, especially if you share the results with a friend.

Tomorrow, think about how you could have made a few better choices. Rather than acting without thinking, try to work out why you have made the choices you did. Often it’s just habit, and you may discover things have changed and you now have other opportunities to make good choices.

Now let’s talk about comparison shopping.

There are so many things to choose from that shopping can be stressful instead of fun.  A good example is shoes.  There are 64 different types of shoes that look good on everyone.  The most popular are Crocs, sandals, boots, sneakers, Ugg boots, flip-flops, moccasins, and earth shoes.

Let’s pick sneakers, which include athletic shoes, joggers, trainers, tennis shoes, and running shoes. Plimsolls, the first sneakers (rubber soled shoes), were invented in the 1700’s. The U.S. Rubber company added a canvas top to the rubber soles in 1916 giving birth to the modern sneaker, called Keds. The following year, the first Basketball shoes, the Converse all-stars, were sold. And in 1924, a German named Adi Dassler, created his own sneaker and named them Adidas.

Before buying sneakers, decide the features you want.  Comfort, quality, style, or technology are good reasons.  Limited Distribution and Perception are not (unless you are a collector).

When you know exactly which shoe you want, it’s time to do some Comparison shopping to get the best price.  There are now “comparison shopping engines” like Google Shopping or ShopSavvy (and others) that have done a lot of the work for you.

The Advantages of Using Comparison Shopping Engines

  • Convenience
  • Price Comparison
  • Introduce More Choices
  • Never miss a sale
  • Reviewed from actual customers
  • Saves transportation costs

But, and this is a big But, don’t make price the “only” factor in deciding what to buy. A cheap pair of shoes you never wear isn’t a good purchase, no matter how great the deal was.

If you prefer, you can comparison shop on your own, once you have a good idea of the product features you want. Go to the websites of the stores that sell the product you want and make a list of products and prices. Some people may find this method more satisfying.

Studies show that comparison shopping is the customer’s best, but least used, technique when spending regardless of the type of expenditure. Comparing prices and products can save as much as 50% off a price you might have paid without making the comparison. About 59% of customers prefer to compare prices online in all categories before making a purchase.

And finally, we get to decision making. You’ve made your choice; you’ve compared the product features and prices, and now it’s time to make the final decision – to act or not to act.

Some people think this should be the first topic discussed in this presentation, rather than the last. We are at the point of deciding to buy, or perhaps not to buy. It involves thinking about our choices and the advantages and disadvantages of acting on that choice.

Our response to these statements can help make the final decision.

  •  I just saw this on TV and want it.
  • I’m bored or depressed, and need to do something that feels good.
  • My friend has one.
  •  It will help me “fit in.”
  •  I don’t need an “emergency fund”
  •  It’s worth going into debt for this.
  •  I’ll worry about paying for it later.

If our response is “True” to any of these statements, a good decision would be to put off the purchase at this time. That doesn’t mean you can’t rethink it if something changes.

On the other hand, if we can respond with a “Yes” to the next statements, the decision act now and buy the item would be a good one.

  •  I can afford it.
  • I really need it.
  •  I have enough money saved in an “emergency fund”.
  •  It included in my budget?
  • I have money in a retirement fund?
  •  It make me happy?

Taking the time to make good choices, to do comparison shopping, and finally to make a decision based on an understanding of what is driving the decision is a process that works for all types of products and services.