5 Key Factors That Influence Your Decision

When you need to decide, 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 decisions:

1. Socioeconomic Factors

2. Information Input

3. Past Experiences

4. Bias

5. Goals

Socioeconomic Factors

Everyone belongs to several groups, which can be based on your income, education, and occupation. They define your beliefs about anything, spending or saving money, skills or innate ability, and social status. They explain why certain groups make choices.

For example, you are choosing whether to go to college or not. If you have a good income, you may go to college to further boost your status but not make money. 

 If you are from a low-income group, you may also choose to go to college, but the reasons will be vastly different. You choose to go to college to improve your status and earnings in life. Same decision, but the socioeconomic factors they come from influence their choices differently.

Information Input

Uncertainty is part of making a decision. There is no way to precisely predict its effect on you, but the information you have when you make your decision is critical.

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

As humans, we tend to spend a lot of time and money trying to get accurate information. Books and educational training provide data and advice. Businesses spend money on focus groups, surveys, and test markets. The information you have is an integral part of how you decide.

Past Experiences

Past experiences matters in your decision unless you did not learn from them. Positive or negative, your learning can help you make the same decision again without expecting the same outcome. Changed something about the situation to have a different result.

Bias

Aside from belonging to a group, you also belong to subgroups. They can be based on age, nationality, and the type and size of your family. Further sub-groups may exist within based on politics, religion, or location.

Sub-groups can have a comprehensive set of values and beliefs. These values and beliefs make you develop biases, and they will influence your decision.

Goals

Your individual goals are also a critical factor that influences your decisions. Whether related to wealth, success, or happiness, your goals shape your decision-making when you pursue what is most important to you.

Always consider these key factors the next time you make a decision. They can explain how you arrive at your decision.