Your decisions about money, investing, and retirement must be made based on logic and rational thinking. The problem is that we often make money decisions with our emotions, which can wreak havoc on your retirement and impact you for the rest of your life.

 

This week is devoted to better-equipping you to make careful, self-controlled, unemotional decisions as often as possible, through better understanding the behavioral finance concepts that influence your decisions. 

Today, I’m talking about decision fatigue. Decision fatigue refers to the deteriorating quality of decisions that you make when you’re in a situation where you must make a lot of different decisions. When you are burdened with too many decisions, it’s just so exhausting, that you can’t stay sharp. So you start making some pretty crappy decisions, just because you’re not as sharp and your just kind of over it. 

The key to overcoming decision fatigue is to just decide on what you can, when you can and stop putting so much pressure on yourself to figure it all out. 

When my husband and I created a will, I was pregnant with our first child. We met with an attorney for about an hour and a half, deciding on everything from when we would pull the plug if I ever became incapacitated, to who would take care of our children if we both died in a fiery roller coaster accident. 

The weight of those decisions was overwhelming, and it would have been nice to take some more time to think through it. But this attorney was expensive, so we pressed ahead, making decisions that would impact our family in big ways with the clock ticking and the attorney bill running higher. 

Sometimes the weight of making decisions on your will, your estate, your social security, medical insurance options, your retirement is overwhelming. And its tiring. So you start doing what I did and just say screw it, let’s just get this over with. That’s when you know you’ve crossed the danger zone. 

As soon as you become overwhelmed, decision fatigue has set in. If you press on, your fatigue can lead you astray into some poor decisions. 

The cure for decision fatigue is just to step away. For an hour, a day, a week, or a month. Sometimes you feel pressured to make a decision right then and there, like I did, but unless you have the presence of mind to realize that you’re not capable of making a smart decision in the moment, you may make a decision that’s fatigued. 

I think I’ll go back and review our will and make sure I still agree with those decisions we made after I was already feeling overwhelmed and fatigued....

If you haven’t already left a review in Amazon or iTunes for the One Minute Retirement Tip, can I ask a favor of you to go do that right now? It just takes a minute.  

Mary Ann recently wrote on Amazon: “I had to shut you off..not good with my coffee”. 

Ouch, Mary Ann! Whether you have a 1 star review and think I taste terrible with your coffee, like Mary Ann, or if these tips are valuable for you and you think it’s worth 5 stars, or anywhere in between, please take a minute to leave an honest review for the One Minute Retirement Tip in Amazon or iTunes. It helps to spread the word, and helps other people find this podcast. 

That’s it for today. Thanks for listening. My name is Ashley Micciche and this is the One Minute Retirement Tip. 

----------

>>> Subscribe on iTunes: https://apple.co/2DI2LSP

>>> Subscribe on Amazon Alexa: https://amzn.to/2xRKrCs

>>> Check out our blog: https://truenorthretirementadvisors.com/blog/

----------

Tags: retirement, investing, money, finance, financial planning, retirement planning, saving money, personal finance, wealth management, fee only financial advisor, financial planner, financial podcast, retirement podcast, financial independence podcast, behavioral finance, behavioral finance concepts, behavioral finance examples, behavioral finance biases, why is behavioral finance important, behavioral economics, investor psychology, behavioral biases, herd behavior, herd behavior and investment, herd behavior financial crisis, loss aversion, prospect theory, choice overload, confirmation bias, anchoring, decision fatigue, overconfidence effect