Making the Best Financial Decision in a High-Stakes Situation


High stake financial decisions can have a significant impact on your finances. Whether it’s an expensive car repair, a large medical bill, or a major house repair, these type of expenses can wreak havoc on your finances.  Make the wrong decision and you could be financially crippled for months or even years.

No matter how good your financial plan is, a large or unexpected expense is bound to happen every now and then.  A budget won’t eliminate financial challenges, it will, however, better prepare you for them.  The goal in these high-stakes situations should be to minimize their long-term impact and to protect your budget and your savings.

How you respond to high stakes financial situations is more important than you think.  

Let’s assume your car breaks down and you find out the repair will cost you $2,200.  What should you do?  If the car is an older car, you’re no doubt going to be thinking whether putting that much money into repairs even makes sense. You may think it’s time to buy something new(er) instead of wasting the $2,200 on the old one.  But, what if you don’t have the money to buy a new(er) car?   

Whatever decision you make it’s bound to have a lasting impact.  To ensure your long-term financial well-being, you’ll need to make the right decisions in such high-stakes situations.

How to make the best financial decision in a high-stakes situation 

1. Minimize the financial impact

Facing an unexpected expense can be stressful.  You may feel like the situation is a no-win scenario.  Although the situation is one you’d rather not face, it’s important that you keep a positive attitude, think clearly, and try to solve it in the best way possible.  

The goal should be to minimize the impact this decision will have on your finances long term. Keeping the financial impact low and having it only affect you in the short-term is key.

2. Think of at least 3 to 4 solutions to your problem

Get creative in solving this financial challenge.  In the car example above, the easy answer would be to buy a new(er) car.  But, spending $20,000 on a new car to avoid spending $2,200 on repairs is not wise.  The added monthly car payment will surely have a negative impact on your budget for a long time.

To minimize the damage and keep the financial impact low and short-term you could:

  • Downsize to one car until you can save for the repairs.
  • Sell something you don’t need to raise the repair money.
  • Work a part-time job or do some freelance work to save for the repair or to buy a reasonable prices used car.
  • Pay from the money you have for part of the repair and work out a payment plan with the repair shop for the difference.  Make sure it’s not a high-interest loan and that it’s a short-term, 6-month or less, pay off plan.

3. Keep your financial goals in focus

The best way to ensure you’re making the best financial decision in a high-stakes situation is to keep your goals in front of you.  If you’re trying to pay off debt, build up your emergency fund, or save for a house, your decision should support not prevent you from reaching your goals.  

Ask, “Will this decision move me closer or further from my goals?”  If the decision you're considering moves you further from your goals, go back to #2 above and find a better solution.

4. Protect and make forward progress

The choice you make in a high-stakes situation should protect your finances and cause you to make forward progress. Don’t make decisions that move you backward financially.  In every season of life, you should be intentional about creating margin and increasing your net-worth.  

It takes courage to make the tough decision, to give up on what you want and do what’s necessary to ensure yours and your family’s long-term financial well-being.


A successful businessman once said, “Solving financial problems make you smarter.”  I agree with that statement.  It is often in times of financial difficulty that opportunities for personal growth and financial gain present themselves.  

A high-stakes financial situation can be an opportunity to improve your financial prowess and increase your financial education.  If you keep a positive attitude and follow the 4 steps I outlined above you’ll make the right decision.