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An individual faces different types of problems, out of which the financial issues are the most commonly seen phenomena. The usually faced personal financial problems are the overspending of income and not knowing the perfect way to save for the future uncertainties. There is a need for identifying these problems in the early phase of life in order to secure the future financially. In this paper, I have applied the Five-Step Model as described by John Chaffee in his book “Thinking Critically” (Chaffee, 2014).
The identified Five-Step Model provided in chapter three of John Chaffee’s “Thinking Critically” book has been taken into consideration to analyze each of the steps of the model significant for problem-solving tactics (Chaffee, 2014). The first step of the Five-Step Model is to identify the problem. In this particular step, I need to define the situation and specify the outcome of the issue. At the same point in time, the art of defining the problem must be presented. According to the first step, the two personal financial problems that I face are improper knowledge of investment and a high level of expenditure (Greiff, Holt, & Funke, 2013). I do not have any financial plan for the future and do not have any controlling measure for my expenditures.
In the second step of the model, the alternatives available must be verified to discuss the major boundaries. The first alternative that I have identified is to discuss the matter with a financial consultant and prepare a future personal financial plan (Greiff, Holt, & Funke, 2013). Therefore, the possible alternatives to solve the issue can be verified considering the legal advice of the consultant.
Coming to the third step, the major advantages, as well as the disadvantages to the selected substitutes, must be listed to ensure the benefits. In the case of my personal problems, I will research the major advantages and disadvantages of every investment solutions (Greiff, Holt, & Funke, 2013). Furthermore, my consultant will assist me in preparing my future plans. Moreover, by verifying the pros and cons of the available options, any additional information associated with the problem solving must be briefed.
The fourth step is to determine the solutions of the personal problems. Through the verification of each of the alternatives, I will choose the best substitute effective for my financial plan (Chaffee, 2014). According to the requirements, the pursuable alternatives must be considered. By following the tactics, best steps to solve the problem should be defined. For example, I will try to invest my incomes in mutual funds, bonds and life insurance to minimize my expenditures.
Finally, monitoring of the methods should be done to verify each of the solution steps has worked effectively (Chaffee, 2014). In order to monitor my progress, I need to identify some milestones that are to be achieved within a certain period. For example, I will save around $30,000 by the end of upcoming two years. Additionally, necessary adjustments are needed to be made to guide the overall process to get the desired outcome.
In order to deal with the issue of personal finance, the Five-Step Model can be utilized to get the ultimate result. By following each of the steps depicted in the paper, I can set up a definite plan to work out the best alternatives available to solve the issue of personal finance. At the same time, to make the best decisions on personal finance, any necessary adjustments should be made so that the problem of finance can be mitigated in an efficient way.
References
Chaffee, J. (2014). Thinking critically (11th ed., pp. 104-136). Wadsworth Publishing.
Greiff, S., Holt, D., & Funke, J. (2013). Perspectives on Problem Solving in Educational Assessment: Analytical, Interactive, and Collaborative Problem Solving. The Journal Of Problem Solving, 5(2). http://dx.doi.org/10.7771/1932-6246.1153
