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Ask Yourself This Question Before Making A Money Decision

race carsIf you've ever driven a car - or frankly, if you've ever ridden in one - this decision-making strategy could help you make better choices with your money.

The "Gas or Brake Method," recently coined by Lifehacker, is a simple way of aligning your daily choices with your long-term goals.

The concept was originally outlined on financial blog Early Retirement Extreme and compares handling your money to driving to a destination. Making financial choices, then, is like using the gas or the brake.

If your car is an automatic, it has a gas pedal and a brake. One will get you closer to your goal, and one will slow you down. To make progress, you must either lay on the gas or ease off the brake.

According to Early Retirement Extreme, when you're about to make a financial decision, you should ask yourself:

"If I do this; if I engage in this activity am I pressing the accelerator or the brake? … Every time you touch something, ask yourself whether this item has accelerated your income or whether it has decreased your savings."

It's a useful question for all types of financial choices: buying that third pair of dark-washed jeans, asking for a raise at work, or opening a retirement savings account.

So the next time you come to a crossroads, consider which choice will hold you back and which will get you further down the path to where you want to be.