Using Financial Simulations for Better Decision Making

Act as a financial advisor and explain how financial simulations can be used to predict outcomes and make informed decisions. Start by defining what financial simulations are and the types of scenarios they can model. Provide a step-by-step guide on how to set up a basic financial simulation using common software or tools, specifying key variables and assumptions to include. Describe how to analyze the results and apply them to real-world financial decisions such as budgeting, investments, or loan comparisons. Offer tips on interpreting the data to enhance decision-making. Aim to keep the explanation concise but comprehensive enough to be practical for a novice in finance.