By: Jack Marrion Founder of Safe Money Places
During the decision-making process, our minds are fed streams of data consisting of words, numbers, and pictures that we then need to temporarily store, while simultaneously doing comparisons and rankings between the different types of new data and older memories, so that finally we can make a new decision. It is an extraordinary process and there are things everyone can do to improve the decision-making process.
Take Your Time
People make better decisions when they don’t feel pressured or rushed. To improve decisions take all the time you need.
Make The Hard Decisions In The Morning
Research has found that many people are at their sharpest within a few hours of awakening because the brain is able to process information more quickly; therefore, you should schedule appointments with doctors and advisors at nine or ten o’clock in the morning.
Make Bite-sized Decisions
There is a phenomenon known as choice overload that occurs when we get so many choices that we do nothing because we’re afraid of making the wrong decision. The solution is to break the big decision into a number of small decisions based on what it important to you.
For example, how do you pick the “best” big-screen TV out of the hundreds of models available? Reliability might be important, so you would see what Consumer Reports has to say about the eight major TV makers. After you’ve decided on the brand of TV, you might go to cnet.com to look at the pros and cons of an LCD versus a Plasma versus an LED television. And after you’ve picked the brand and type of TV, you should decide the maximum amount you want to spend. What you’ve done in the process is broken the big decision into a number of smaller, more manageable decisions.
Or Limit The Effect Of A Decision
Although you can’t buy a third of a TV, you can limit the effects of many decisions. For example, if you’re not sure what future interest rates will do, don’t put all of your money into a 5-year certificate of deposit, a multi-year annuity, or in a money market account. Instead, split the money among the choices. In the financial world it’s more important to not be completely wrong rather than striving to be completely right.
But Do Make A Decision
Often, we tell ourselves that we’ll decide on an issue “later,” but what we frequently do is decide not to make any decision because we might regret it. Sometimes doing nothing is the best answer, but usually action is required. What you need to do is to tell yourself that you will make a decision today and accept the consequences of that decision.
Someday we may find a pill that helps us make perfect decisions all of the time. However, until that day arrives, you still have many actions to take that can help you make better decisions right now.