It wasn’t for nothing that the Ancient Greeks considered prudence, the exercise of sound judgement, to be the prime virtue. More than any other personal characteristic, prudence is the one that can have the biggest impact on your life.

Prudence is all about making well reasoned judgements regarding practical matters. Modern life isn’t very conducive to exercising prudence since we are constantly being encouraged to make snap decisions regarding all sorts of things and when we aren’t being forced to make snap decisions we are being pressured in to accepting something that might go against our better judgement. And it’s not just external pressures that can cause us to make bad decisions. One’s own ‘heart’, in the metaphorical sense, is responsible causing more than its fair share of bad decisions.

I know I’ve made bad decisions that I wouldn’t have made had I exercised a bit of prudence. I’ve signed up for credit deals I didn’t need and couldn’t afford. I’ve also accepted job offers that I later came to regret, despite the fact that there were warning signs that I would be making a mistake from the very beginning.

Prudence is for most people something you learn through the experience of your mistakes in life. It’s also something you don’t know you have, you are simply more prudent than you used to be. The curious thing is that once you become aware of the concept of prudence and how it can benefit you, you naturally start to exercise it more. I know it worked like that for me. Whenever I am faced with making a decision that could have substantial positive or negative repercussions, I always ask myself “Am I being prudent?”

It is easy to make yourself more prudent. Firstly you should take extra time to make decisions weighing up the facts of the matter. Ask yourself what will the repercussions of my decision will be a week from now, a year from now and and further on. Try not to be led by your heart. If you make decisions based on what your heart says then you always choose the most fun decision, just not necessarily the most sensible one. Don’t be afraid to walk away from making a decision in order to consider matters, very few choices in life genuinely require an immediate decision.

The above could be described as active prudence, situations where you are given a choice not of your own making. There is also passive prudence, this is where you go out of your way to do things that will benefit you and your loved ones in the long term. A good example of this is saving for a rainy day or perhaps being pro-active in maintaining things so that you don’t end up with big repairs bills. It’s prudent to have an occasional brain storm and ask yourself what could you do to make your just that little bit better. Just try not to be so prudent that you stop having fun, it’s all about maintaining a balance.

Prudence is an essential life skill that if exercised can bring you many benefits. If you need an example of why prudence is good just look at all those bankers who are now losing billions because of all those questionable and very un-prudent decisions the made. This recession may the best advert for prudence thinking there has ever been.