How to let data drive your life decisions

In so many areas of life, we’ve become data-driven. From TV show recommendations on your favorite streaming service to your bank’s suite of tools that analyze your spending patterns, data is constantly being aggregated, massaged, and presented in the world around us. 

That data can provide some valuable insights if you know how to use it properly. So if you’ve got some big life decisions weighing on you, here’s how to effectively let data drive your decision-making process. 

How Do You Use Data to Make Decisions? 

Data can drive simple decisions, like what to watch next or which music station you might enjoy. But when it comes to more complex considerations like which healthcare plan to choose or deciding between term life insurance or a whole life insurance policy, you may not have considered using data at all. 

A major benefit of using data to make decisions is that it helps remove the emotional component. For example, using data to drive your financial planning or insurance purchases means you’re following the math, not your feelings that may skew decisions one way or the other. So, if you’re ready to take the critical step of putting data in control, here’s how to do it in 3 simple steps. 

Outline Your Objectives 

Before you begin to track down data or record your own, define the questions you want to answer. Some significant life decisions where you can use data to assist are: 

  • Financial planning: How much is your family spending, and where are opportunities to cut back? What investments tend to be the most successful over time? 
  • Insurance: What is the risk of certain illnesses and disabilities, and what insurance coverage is most appropriate? What behaviors do you partake in that could make you more of a risk for insurers? 
  • Health: How can data help you improve your overall health? Can tracking water intake, nutrition, or past workouts help establish patterns and make changes? 

Determine What Data is Relevant 

With so much data available, both from your personal life and the general population, failure to pull out only what’s important can leave you in a state of analysis paralysis. That means you have an overwhelming amount of data and not enough time to go through it, leading to inaction. 

Analysis paralysis may be part of the reason that in 2020 around 46% of the US population had no life insurance coverage, according to BestLifeRates. But you can use relevant data to gather quotes and assess the cost of a term life insurance or whole life insurance policy before making a purchase. And that means you can choose the right policy that gives you peace of mind and financial protection for your family, without the overwhelm. 

Measure and Repeat 

The most important aspect of using data to drive your life decisions is objectively measuring success and iterating as you go. Just like a business evolves over time by reviewing the most up-to-date analytics, so should you in your personal life. Don’t be afraid to re-assess your objectives, ask new questions, and analyze new data as it becomes available. 

The Bottom Line 

It seems like these days, we’re inundated with data from all sides. But effectively leveraging that data and putting it to work by determining what’s relevant leaves you in a stronger position. Putting data in the driver’s seat means you can remove the emotional component of difficult life decisions. And that makes it more likely that you’ll make the right choice. 

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