Steps for Decision Making Case Study
Action Page 2-3
Here is a sample issue using the five-step model for decision making:
Maria’s television is broken and her goal is to buy a different one. She is trying to decide if she
should buy a new one now or wait for a few months when she could have saved some money. Basing the decision on her money goal, here are the steps she follows and the questions she
asks herself:
1. What is the money issue or decision you need to make?
Purchase a television now or in the future.
2. What are the possible options or choices for making that decision?
A. Borrow a television. E. Buy in a few months with credit.
B. Find out the price of repairing the F. Do not buy a television. broken television.
C. Buy in a few months with cash. G. Save the money for some other purchase.
D. Buy now with cash. H. Buy now with credit.
3. What are the possible results (Pros and Cons) for each of the options? Not all options
have a pro and a con.
Pros
Cons
A. The money that would have been spent can be
The person from whom I borrowed the
saved.
television may want it back.
B. I may have enough money or the repair bill.
The repair bill may be more than I want to
spend on the television.
C. I can save money to make the purchase.
There may not be money available for other
D. expenses or purchases.
E. There will be a credit payment to make.
There may not be money available to make a
credit payment.
F. I can spend time doing other things.
I can lose the option for entertainment, news, etc. G. I can buy something that meets another money
I lose the option for home entertainment.
goal.
H. There will be a credit payment to make. There may
not be money available to make a credit payment.
4. What is the decision?
Buy in a few months with cash, allowing time to save for the purchase.
5. When will I look at the decision again?
I will check in two months to see how much I have saved for the purchase. If it is working I can
keep saving to reach my goal. If it is not working I can revisit the options and select another that
will help meet my goal.
Copyright © 2009. Regents of the University of Minnesota.
56
University of Minnesota Extension