Decisions, decisions, decisions…we make about 35 thousand of them every day! Tons of them happen seemingly without us even realizing we’re making a decision, like reaching for the shampoo bottle when we’re in the shower or catching a utensil before it falls to the floor. Many of them seem obvious and routine, but sometimes we’re faced with decisions to make that have far too many options. Sure, the Cheesecake Factory menu is about 20 pages long and it seems hard to decide what to have for dinner, but that’s sort of a fun one to make! When it comes to making financial decisions, it can be downright paralyzing when we have too many options when it comes to how and where to invest our money. This is what we call the paradox of choice.
In fact, studies have shown that the more investment choices people have in their retirement plans, the lower the percentage of participation actually is! Mutual funds, bonds, stocks, 401k’s, it’s a lot to wrap your head around and potentially enough to make you walk away from it all and give up.
If you have a tendency to overthink these decisions, we’ve got a list of pointers to share with you to beat this predicament and get you organized:
Determine a Deadline
Oftentimes our brain’s tendency is to go down an endless rabbit hole of exploring every option under the sun with no time limit. Now you can definitely do that, but it’s going to come with the side effect of feeling overwhelmed or frustrated. Instead, consider time blocking and tell yourself that you’ll work on exploring a certain option for a predetermined (and realistic!) amount of time or maybe a time block on how long you’ll take weighing your options and stick to that.
Consider Opportunity Costs
Fixating on making sure you purchase the perfect stock at the perfect price is one thing, but the bigger decision is actually whether you’re in the market or not. Of course you want to make a good decision, but deliberating too long will inevitably come with the price changing and as such, making this decision a moot point.
Another scenario that might illuminate this point a bit more is listing your home for sale and holding out so long for the highest and most perfect offer to come in before buying a new one in your desired location, price point, etc. that the housing prices skyrocket and you end up paying more than you wanted to for your new home.
Perfect is the Enemy of Good
Not every choice you’re going to make, whether it be financial or not is going to be a homerun, but doing nothing is worse! It can feel scary to not be certain whether you’re making the perfect decision, but once you get the ball rolling on making choices, you’ll find it’s not so intimidating; and most things aren’t permanent!
Phone your Financial Friends - Us!
We are always here to help be a second set of eyes and ears or to help you weigh your financial options. Remember, indecision is a decision too and the longer you put off making great financial choices, the more you’re likely to miss out on.
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