Paralysis By Analysis

Paralysis By AnalysisThere are a lot of things that keep people from getting their personal finances in order. One of the issues that I struggle with most is paralysis by analysis. For me, it’s a two part problem. First, I always want to get the best deal out there. Second is that I read so much about personal finance that I see how fast that things change.

These two issues don’t meld together well when a decision needs to be made. I know that things are likely to change so I want to delay and wait for a better deal that I’m sure will come along rather than commit to something that is the best at the moment. There are times when I have to step back and simply tell myself to do it to get the sa

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5 Responses to Paralysis By Analysis

  1. Tom says:

    YES! I have wondered if other peopld do this too! I spend all this time and energy researching something for the very best deal, and often I am so overwhelmed by all the data and purchasing options that I lose sight of the REASON for trying to get a good deal–to save resources (well, ‘time is money’ and wasting time is DEFINATELY wasting money; so, in the end I actually fell like I am worse off for all the research!).

  2. samerwriter says:

    Several years ago there was a study in Scientific American about how too many options can keep people from making any choice.

    The researchers put up two displays of jam at a supermarket. One had only a few different types of jam, and the other had several more options available. Far more people purchased jam from the display that had only a few options available.

    That really hit home with me because, as you mention here, I do the exact same thing. Case in point was a couple weeks ago while my wife and I were shopping for a shower door for a new bathroom. Between Lowes and Home Depot there are probably a dozen different doors that seem functionally equivalent. Now I’m spending hours researching the differences in shower doors when it probably really doesn’t make much of a difference.

    The same is true of financial products. Do we really need to have 60 mutual funds available in a 401k plan? I’d wager that participants in a plan that offered only target retirement funds would get a better return than those in a plan that overwhelms them with fund choices.

  3. fractalbrothers says:

    this might be true, but I still find value in researching something well, even if it takes me a while. And I will still buy off of ebay rather than best buy, any day.

  4. sylvia says:

    I love the title so much that I am saving it! You’ve put your finger directly on a major reason for procrastination in many areas of our lives. I had friends who came back from a long tour in an undeveloped country as missionaries, and went shopping here for the first time. They had to leave the store and go home empty handed, due to being so overwhelmed by the largessse of the store. The cereal aisle was the worst. They were used to telling the store owner that they wanted cereal, for example, and if he had any, that was what they took. There was no debate about what kind of cereal-just if they had any.Now, choice is a wonderful aspect of our lives, but too much of any good thing can become quickly debilitating.

  5. Aleta says:

    I had the same problems with wondering whether I had the best buy. I believe most of this comes from learned responses. I had seen my step-father agonize over finding a lower price that he had paid. I have finally had to come to the conclusion that if you save at least 15 or 20 percent, that’s great. The problem is that you may not have the luxury of waiting until next week because you need it now. It has taken me some time to understand and except what is possible and what isn’t possible.

    As far as the target funds are concerned, they are great. They’re called simplicity and most of us (according to what I hear here) could use plenty of this. I finally bought them myself and have not regretted it. I found out about them from a well-known finance guru and it just made perfect sense. It is hard to beat the market.

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