These days, it feels like we have our choice when it comes to almost everything. Technology allows us to basically choose where and when we get anything for every aspect of our lives. But, are so many options a good thing? Well, yes and no…let me explain.
There have been studies that show when we are given more options, it actually somewhat paralyzes us from making any decision at all.
Take a look here.
I’ll sum it up…too many choices make us worried we won’t choose the “best” choice, so we choose nothing at all to avoid making a “wrong” decision. The study looks at both consumer buying behavior, but also and 401k participation and investment strategies. So we can directly relate this to our finances.
But, doing nothing is always worse than doing something if you ask me.
In the study example, people were worried about picking the best flavor of jam. Would strawberry be the best, maybe, but I best raspberry is pretty good too right? Maybe you didn’t pick either, but I bet no matter what, you’d be happy with whatever jam you picked.
Enough about jam, when it comes to our finances, it can be overwhelming, especially if you need to fix your current financial situation. You might ask yourself “Where do even I start, how do I begin? What if I don’t pick the best choice?” There are so many aspects to think about and so many ways to fix any given one of them, what’s the best one? You’re in financial paralysis. Faced with too many choices, it’s too easy to throw your hands up and do nothing. Although all are valid concerns, doing nothing to fix your financial situation is definitely the “wrong” choice.
Choose one aspect of your finances you want to fix and start from there. Simple right? Just choose one thing. Don’t worry if it’s not the absolute best first thing to fix, you’re just getting started. Even if you’re not sure about the best way to fix whatever you choose, simply making it even a little bit better is a step in the right direction and you can build on that. After all, you’re not going to fix everything at once and it won’t happen overnight, it’s a process.
If you find that the path you took isn’t the best, that’s fine, now you know, but at least you’re moving in the right direction. Take a deep breath, regroup and tweak your solution. Rinse and repeat as necessary.
Setting financial goals is always important, even if they aren’t the absolute “best” choice right away, you can always try another and another until you do find the “best” solution for you. Making a choice in the first place is the biggest hurdle to overcome.
Thanks to technology again, there are more ways than ever to invest your money. Many people sit on the sidelines because they lack the knowledge they think they need in order to invest. Many of us think we need some intricate, in-depth knowledge of the stock market before diving in. I’ll let you in on a little secret, no one really, truly understands the stock market. It goes up when you think it should be down and vice versa.
When it comes to investing, too many options again paralysis us from doing anything at all, and that simply can’t happen. Investing is simply the best way to grow your money and is an absolute must for anyone looking to achieve financial independence.
Here is an easy start, pick an index fund. Literally, any index fund will do. They are simple, low-cost, safe investments. You can’t go wrong with them. Is it possible you don’t pick the “best” one, sure, however, picking nothing to invest in would be worse. Like fixing your finances, to begin with, just making that first choice is the biggest hurdle to overcome.
Maybe down the line you realize want to invest in mutual funds, great. Maybe you move on to stocks too, awesome. Even if you don’t do either of those and you keep investing simply in index funds, you’ll be up far more money than any savings account could ever give you.
The important thing is to start investing in the first place.
Make the Choice to Make A Choice
I’ve said it a few times here, but it’s worth repeating. Simply making any choice to better yourself or your financial situation is the hardest part. If you find there was a better choice out there, that’s okay, you’re still better off than you were yesterday. Now that you realize there is a better option, take it and better your situation even further.
Start with one aspect of your life and then keep adding to it until you’ve reached your goals. Once you’ve reached them, set new goals and keep going. The important part is to make the choice to actually make a choice.
Living in financial paralysis will get you nowhere, the important thing is to get started and figure out what works best for you. More than likely you won’t get it on the first try, luckily the rest is easy, now get started!