• Betsy at RVPF

This or That?: Making Decisions as an Adult

My four-year-old son Simon came home last night with a new game called "This or That." The premise is

simple: when presented with two options, you get to choose between options such as macaroni and cheese or chicken nuggets, ice cream or a Popsicle, or a bicycle or scooter. As you can

imagine, the choices get increasingly absurd. He eventually presented me with the option of staying in a regular chalet or an

oatmeal chalet. Apparently when he had been given that choice, he chose oatmeal chalet. (Where do they come up with these things?) My inquiry about the details of an oatmeal chalet was met with a concise response of "It's just make-believe, Mom." Turns out it's fun to make pretend choices.


Unfortunately, most of our choices as responsible adults are rarely as easy as Simon's game of This or That. Decision fatigue, or the increasing difficulty of making wise decisions after a long string of decisions, is well-documented. A 2009 study titled "Extraneous factors in judicial decision making" and coauthored by ShaiDanziger, JonathanLevav, and Liora Avnaim-Pesso demonstrated how time of day may affect a prisoner's chance at parole. Their paper states "You are anywhere between two and six times as likely to be released if you're one of the first three prisoners considered versus the last three prisoners considered."


A 2021 study titled "Time-of-day changes in physician clinical decision making: A retrospective study" by Italian researchers Peter Trinh, Donald R. Hoover, Frank A. Sonnenberg reported that "There is some statistical evidence on an individual and group level to support the presence of time-of-day effects on the number of diagnostic tests ordered per patient visit. These findings suggest that time of day may be a factor influencing fundamental physician behavior and processes. Notably, many physicians exhibited significant variation in the primary outcomes compared to same-specialty peers."


My anecdotal experience is that my spouse occasionally comes home from a day in the clinic and struggles to make even small decisions. Thankfully he is fairly self-aware and can readily report his level of decision fatigue. I then know it's best to make as many of the unimportant decisions myself (like what needs to be in lunchboxes the next day) and leave the bigger decisions that require joint decision-making for another day (like pursuing a home renovation or when we might want to go on a family vacation).


I've often laughed at the meme that states "Come here you big, beautiful cup of coffee and lie to me about how much we're going to get done today." In the midst of my chuckling, I'm painfully aware of the daily gap between my aspirational self and my actual self. Take the landscaping in my yard for example. I'd welcome the chance to do routine tasks like pruning the trees and shrubs. However, without the knowledge of which plants to prune, which shears to use, what time of year I'm supposed to prune, etc., it's easy to get overwhelmed. Sometimes we simply don't have the capacity to take on another field of study to enable us to make good decisions. Chances are fairly good that I'd get overzealous with the shears and end up doing more harm than good. That's why we happily contribute to our local economy by hiring a landscape maintenance company. Maybe someday we'll take the time to learn about DIY'ing our landscaping, but it's not going to be when we have small children at home.


For a lot of people, this is the same situation they face with their financial plan. The small day-to-day decisions are usually pretty easy. This could include which restaurant fits into the budget, how much to spend on a birthday gift for a child, which gas station is least expensive or even what percentage of income to put into your work retirement plan. The problems arise when the bigger decisions that require either joint decision-making or some amount of research or education come into play. These are the decisions that often get put off for another day, week, month or year(s)! Examples include reviewing employee benefits options at open season instead of just sticking with what you had last year, deciding if your investment strategy needs a tune-up, or reviewing a 10-year old homeowners insurance policy for current adequacy (hint: with inflation, it may not be!).


A wellness article by Stacy Colino in The Washington Post describes seven ways to combat decision fatigue including prioritizing sleep, managing expectations and enlisting a choice advisor. Many believe that the value of a financial planner lies most significantly in their ability to select the best returning investments. However, R&V Personal Finance, LLC and other fee-only fiduciary firms weren't built to merely serve investment management needs. This firm was built to ease the burdens of clients by helping them prepare for unexpected events and then keeping a level head when they happen, encouraging consistent saving and investing habits even in the face of sustained headwinds (like right now!), responding positively to changes in the micro or macro environments and helping make money decisions, both big and small, that feel overwhelming.


If you find yourself struggling to make financial planning decisions that don't have a clear right answer like how to respond when your college-aged kid runs up their first credit card bill, choosing between traditional or Roth, when to take Social Security, using a 529 plan, setting up a trust, or getting good insurance coverage then let's talk it through.


From there, give yourself permission to spend your time and energy playing This or That with more exciting decisions like "Hawaii or the Caribbean?", "kayaking or canoeing", "Petite Syrah or Cabernet" or even "chalet or oatmeal chalet?"



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