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Factors that influence your decisions.

When you need to make decisions, do you know what causes you to choose one thing over another? Your decisions aren’t random.

Scientists, business leaders, and psychologists agree that these are the five key factors that influence your decision:

1. Socioeconomic Factors

2. Information Input

3. Past Experiences

4. Bias

5. Goals

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1.  Socioeconomic Factors

How your socioeconomic factors influence decisions matters as it relates to who you are, and the connect with these groups.  Your groups reflect your income, education, and occupation.  These broad categories help define your beliefs about how to spend or save money, the importance of skills over innate ability, and your status in society which influence your decision.  Psychologists use these socioeconomic factors to explain why certain groups of people make the decision they make.

As an example, imagine where the decision is whether to go to college or not.  If you belong to a high-income group, you may decide to go to college to boost your family name or standing, but not because you need to get an education to earn money.

Someone from a low-income group may decide to go to college, but the reason will be vastly different. They will often select a college to improve their status and earnings in life.  The decision is the same, but the socioeconomic factors they come from influence their decision differently.

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2.  Information Input

Making a decision often involves a degree of uncertainty. There is no way to predict precisely what effect your decision will have. Your decision is only as reliable as or as weak as the information that you have at the time. If you have valid, useful information, you will most likely make decision that benefits you.  If your data is wrong, your choice may not result in the outcome you want.

However, the information you have when you make your decision is crucial in deciding.

Your decision is only as reliable as or as weak as the information that you have at the time. If you have valid, useful information, you will most likely make a decision that benefits you.  If your data is wrong, your decision may not result in the outcome you want.

Humans spend a lot of time and money attempting to get accurate information.  Self-help books and educational seminars provide a wealth of data and advice.  Businesses spend large sums of money on focus groups, surveys, and test markets.  Wars may be won or lost based on surveillance and knowledge about the enemy.  The type and quality of the information you have is a significant part of how you decide.

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3.  Past Experiences Informs Decision

Past experiences only help you decide if you have learned something from your previous situation.  What you learned may be positive or negative, but you will hesitate to make the same decision without expecting the same outcome.  It would be best if you changed something about the situation for your decision to have a different effect.

Parents often tell a child not to touch the stove because it could be hot.  If the stove is off, the child may feel the burners without experiencing any consequences.  They will usually continue to touch the stove, expecting it to be cool and safe.  But when the stove is on, and the child feels the heat, they learn that negative consequence for their behavior.

Each decision you make influenced by past experiences and builds on the lesson you learned from the situation.  If your previous decision had a positive outcome, you would be more likely to make a similar decision again.  If your past choice had a negative result, you will usually try an entirely new approach and make a different decision.

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4.  Bias

You belong to groups based on socioeconomic factors, but you also belong to subgroups based on age, nationality, and the type and size of your family.  Within these subgroups, you may further belong to additional subgroups based on politics, religion, or location. Each of these subgroups identified has an overall set of values and beliefs.  internal bias and view of the world shape each decision you make.

When you make a decision, one of the critical factors that influence you comes from the combined attitudes and input of being in your group.

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5.  Goals

Your individual goals are also a critical factor that influences your decisions.  When a person’s goal is to save money for a bigger house, their decision will reflect that goal.  They may choose to take the bus to work instead of paying to maintain a car or limit their activities to low-cost options like renting a movie instead of going to the theater.  But if a person’s goal is to spend their time being social, they may rent an apartment and use their money for outings instead.  Your goals shape your decision making when you pursue what is most important to you.

Next time you need to make a decision, consider the key factors that influence you. Understanding these key factors helps explain why you chose what you do. 

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