Reduce your decision making fatigue
We face hundreds to thousands of decisions each day starting from the moment we wake up.
What are we doing today?
When do we need to be where?
What are we going to eat for breakfast?
These are just a few examples and to say it can be exhausting is an understatement. But that’s just life, right? Well, yes and no.
We can’t eliminate the need to make decisions but we can stack the deck in our favor.
Decision-making fatigue is reduced when we establish default decisions ahead of time.
Think about your morning routine. Here’s mine:
Wake up
Shower
Help the girls get ready for camp/school
Make/have coffee
Drop off the girls
Start my work day
Does it always go according to plan? Of course not. But I don’t have to think about this routine very much. I just do it and that allows me to save mental capacity for other decisions throughout the day.
Having a financial routine in place can similarly help you reduce financial decision-making fatigue. For example…
Default decision: Max out your retirement savings using a low-cost, all-in-one index fund.
Automate your contributions and select an appropriate asset allocation index fund. Boom, you’ve just freed up bandwidth for other financial decisions that can’t be as easily automated.
Default decision: Pick your cash cushion number and stick to it.
Once you’ve established how much you want in your cash cushion at all times, you’re no longer scrambling to figure out where the necessary funds are going to come from when one of life’s many curveballs comes our way.
Default decision: Use sub-accounts to break out money for different purposes.
Our mental accounting gets fussy when one account serves too many purposes. Instead, try creating sub-accounts so you can see how much money you have set aside for each specific purpose. Some examples could include a vacation fund, a new car fund, and a future estimated tax payments fund.
As you can see, a little bit of preparation and work up front can go a long way towards reducing your decision-making fatigue. This should also lead to better decision making around the things that really matter most to you.
So if you haven’t already, work on establishing your own default decisions. Then watch your mental fatigue plummet while your overall quality of life improves.
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