As millennials, we have choice, cash flow and time on our sides. Every day we make countless decisions about where we live, our careers, where we travel to, who we ‘swipe right’, what brands we buy, and what we choose from the dessert menu.
The trouble is, with so many good options available to us at any one time, we can get stuck in analysis paralysis.
We all do it in restaurants. We think ‘this looks good’ and ‘that looks good’, and then the waiter comes, and we say, ‘I need more time’. When they come back, and we haven’t decided, we make an impulse choice to take the creme brulee over the chocolate fondant.
Even as we crack through the crunchy surface and delve in, we wonder if the fondant really would have been a more ‘perfect’ option.
In the case of picking dessert, indecision and possibly getting it ‘wrong’ isn’t a big deal. But when it comes to our finances, this analysis paralysis can mean we miss out on achieving the goals that have meaning to us.
What’s behind this deliberation?
Are we perfectionists? Do we have FOMO? Are we afraid of making the wrong choice and being stuck with it forever?
I think we’re fixated on the idea of finding the ‘one perfect choice’. So we avoid making decisions, or we’re scared to make decisions, because if we commit to something we’re missing other options.
There are so many parallels we can make here – decisions around dessert, dating, dresses, everything! But of course the one I’m going to get to soon is our money.
So what if I can’t choose?
This ‘quest for the perfect one choice’ means we either avoid making decisions and don’t make progress towards our goals, or we just conform to what everyone else is doing, because it can feel safer to fit in with the social construct.
At the restaurant, this could mean saying ‘I don’t want dessert because everyone else says that they don’t’ (for my friends reading this, I ALWAYS want dessert).
Or we could order something that we don’t want, saying ‘sure’ to the caramel tart even if we’re full, just because everyone else is up for it.
The flip side of this deliberation is impulsivity. When that creme brulee arrives, we think ‘why the hell did I order creme brulee?’
In my experience as a finance coach to millennials, I see we’re flitting between decision avoidance, and impulsivity. And rarely does this lead to optimal outcomes, especially when it comes out our finances and future goals.
Decisions and our futures
Analysis paralysis is impacting the approach we take to how we earn our money, and how we invest it.
When it comes to income, we won’t apply for jobs, pivot our careers or make lateral moves, because we’re stuck in the ‘what ifs’.
For me, the decision to leap from corporate finance into wealth management was terrifying! I had a reliable career mapped out. But instead of getting the caramel tart with everyone else, I took the risk and opted for the cheese platter. And I found out I bloody love cheese!
Analysis paralysis also impacts how we invest our money.
People come to me with piles of cash, but no real wealth, as they’re shit-scared of making a less-than-perfect investment decision.
As a result, they’ve done nothing.
And when it comes to building wealth, doing nothing, (which generally is keeping our money sitting in cash), is the one guaranteed way of not reaching our goals.
Many decisions can be just as good
The fact is, that despite spending hours weighing up pros and cons, there can be multiple good ways of doing something. I will recommend a great investment portfolio to a member, but there are other amazing investment portfolios that are just as good.
I see members with their knickers in a twist over six basis points on fees – without thinking, ‘I’ve been out of the market for six months whilst I’ve been deliberating over 0.06 percent difference.’
One area where we all seem to make confident decisions is travel. We have the entire world to choose from – so many cities, so many towns – and somehow we make a choice of destination and follow through. So we can do it.
We need some of this decisiveness with our finances, or we’re missing opportunities to grow our wealth. How many times have you thought, ‘I wish I had started this five years ago?’
Cutting through indecision
We analyse the pros and cons, but what about if we looked at pros and pros?
If we can weigh up some decisions in terms of the positives on each side, it can help us see the good in multiple options and just get on with it.
We can do this with the dessert menu, and do it with our career or investment choices, and see what difference it brings to our mindset.
It’s also important to remember that we’re not necessarily stuck with the choices we make.
If you order the creme brulee and you don’t like it, is it really that bad to put up your hand and say to the waiter, ‘Actually I want to order the chocolate fondant?’ (Yes. I’m aware of the food and money wastage implied in this example, but you see the point that if it really matters to you, you can change.)
Picking the ‘dessert platter’ can also help take the pressure off. Perhaps you don’t need the one perfect house, or to invest in the one winning managed fund, but a handful of options could spread your risk and get you to your goals.
No decision, no impact
When it comes to building wealth and reaching our goals, the biggest risk is not making a decision, leaving your money stuck in cash, and staying out of the market. If analysis paralysis is holding you back, you need a solution.
If someone, a financial coach like me, a waiter, a trusted friend with excellent taste in food and life, has to physically kick you over the edge to make a move, then that’s what it takes!