Decision Fatigue and Financial Management

A few years ago, I was on a trip overseas with my husband.  The trip was fairly lengthy, about 9 days, and involved multiple logistical operations, airline tickets on several airlines, hotel reservations, ground transport, visas, meetings, and so on, and required a fair bit of planning.  Since I tend to need some help with organization, I was fairly meticulous in plotting an itinerary with specific instruction notes of early checkouts, eat breakfast before departing, exchange more money if needed. Generally, things went without any major hitches, but by day 8, I felt absolutely exhausted, totally spent of all of my mental energy (despite feeling physically well).  Interestingly, the NY Times had a lengthy piece on this a couple of weeks ago, entitled “Do You Suffer from Decision Fatigue?” outlining a well known situation that many people face of depleting your reserves of willpower.

Since I had previously worked in a high paced corporate environment, I assumed that I was relatively immune to decision fatigue, or acclimated to having to make a lot of decisions and supervise a large team daily, so it was interesting for me to read about the concept of depletion.  After having left the corporate environment, I have placed an extra emphasis on good health, exercise, stress, management and healthy eating.  Part of the stress management includes trying to avoid reaching a point of decision fatigue like I did on the overseas trip. I’ve found that some small steps can be a great help, and are good for financial and other situations:

–The biggest way to avoid decision fatigue is to stop thinking of every situation as an unbounded set of infinite possibilities which results in choice fatigue.  In situations where there are multiple options, it helps to very early on, narrow those choices substantially, leaving the crucial decision to a choice among 2-3 options.  In financial management this extends to picking the right investments, best accounts, asset allocation, and other things. Stop thinking of it as an infinite set. I’m reminded of the advice that is given to parents of small children of limiting the decision set to “would you like strawberries or apples with your lunch?” rather than “what would you like to eat?”  The creation of a binary decision is often useful (and time saving).

–Create rules that help guide decision making — for example, if you are looking to make a large purchase and have a strict budget limit, stop spending so much time looking at things that are outside that limit.

–Enroll others to help out — delegating responsibilities is a good way to empower someone else, and also corresponds with lowering the burden on yourself.

--In certain situations, have your decision in mind before beginning — I have talked about how this is useful when going out with friends, to know that when you meet them at the coffee shop to pre-plan that you will have the (delicious) vanilla scented tea with a splash of milk.  This will prevent you from browsing, being tempted by the many latte and cappuccino combinations, and remove some of the temptation for the lemon scones.

I would be interested if others experience this decision fatigue and any coping mechanisms you might recommend.

shared at this week’s Carnival of Personal Finance