Updated: Feb 8
With so many products, services and information available on personal finances, are you overwhelmed and unsure on what direction to take?
By: Allan R Kirby
“Decision fatigue is more common today with the fast amount of financial information available"
We are living in the digital media age, where huge volumes of new financial information are being created every day. This also adds to the vast amounts historical data that we already have available to us. The numbers are staggering and it’s only going to get worse. This mountain of financial digital media is now being questioned more and more and rightfully so. Why you might ask? Well first, it’s becoming more difficult to differentiate between advice from authentic experts versus that from people who just duplicate, copy and share information, passing it off as their own without truly understanding it’s meaning. Secondly, it seems almost impossible to figure out what is good information and what is bad, especially in the field of personal finance. Finally, I am now finding that even when you do filter out bad information, you can still find personal finance articles that provide conflicting advice. This is not helpful especially for someone trying to figure out what to do. All of these issues are leading to many feeling overwhelmed and unsure what direction to take with their finances. This is what is called decision fatigue, and what’s worse is that this problem is actually creating anxiety with readers because many start to question if they are making the right decisions.
“Sometimes seeking professional advice from a money coach or advisor may help"
Seek Expert Advice
This is what I actually did when I first started my journey to take control and understand more about my finances. Going online and seeking advice is great but as many of you will find, it can actually be incredibly difficult to figure out what is the correct path to take. One way to weed out the information very quickly is to speak to a money coach or a financial advisor. Each has their own strengths and weaknesses and in some cases you will need to pay for advice, but it will clear the noise and allow you to get direct information in a timely manner. How you choose to use the information is up to you of course. In my case I spoke with a financial advisor who helped me understand where I was at and what I needed to do. Armed with this information I decided to head out on my own. However, I ended up with a much more clear picture on what I was looking for after seeking expert advice. It did help me layout what I would need to do, so it’s a good starting point if you’re unsure on what to do.
“Avoid over opinionated advice as well as advice that makes you feel guilty"
Weed out the Bad Information
I wish I could give you a secret formula, but the reality is that you need to do some research. This will take time, in order to find simple, relevant information that provides you a clear path on what to do in your current situation. It’s also important to ensure you can get balanced financial information that looks at all sides. For example I hate titles of articles such as “5 mistakes everyone makes in finances”. These are great eye catching headlines but in the end make you feel either guilty or frustrated because you do not make the mistakes highlighted. It’s a waste of your time. Additionally, there are at times very opinionated articles that again only end up making you feel bad. The most recent was Suze Orman’s rant against coffee buying which makes you believe that you can become a millionaire just by making your own and forgoing Starbucks. The assumptions of achieving this million are unrealistic and requires an incredible amount discipline, luck and a rather high return. In fairness I do firmly believe buying coffee will bite into your budget and making your own coffee will help you financially but it’s highly unlikely you will become a millionaire. Speaking about millionaire my final thought is for you to “Be Careful” of any advice that states the ease of becoming a millionaire Start a successful business or succeed financially; it’s never easy for most people. Oversimplification of personal finance is common and I will keep pounding the table on this. “If personal finance was easy, we would all be millionaires”. This is not that case with reality. Just avoid websites or social media such as Instagram, Facebook and Pinterest posts such as “how to become a millionaire in 5 easy steps”. Whoever wrote these posts is likely not a millionaire.
“You need to find the path that is right for you, not the experts"
You will make mistakes
This goes without saying. You will make mistakes and sometimes you might not get it right with your first decision. Mistakes will happen but the most important thing you can do is to accept your mistake, knowing that you have learned a hard lesson which will help you make better choices in the future. I too had to face the fact that I have made a few bad choices, for example investing in a bad stock where I did see a loss, but I learned quickly. In my case I learned that I should always seek quality instead of looking at the stock price and doing my homework on how the company is performing and where it is headed. However, I embraced the mistake, realized my money was lost but I did end up becoming a much smarter and more patient investor. It took a lot of time but it did help knowing that I could recover and learn from my errors.
I wish I had better advice to give. Ironically there is no shortage of that online for personal finance. All I can tell you is what has worked for me and others I have helped over the years, which is to seek advice and to figure how to weed out bad information. Knowing that you will make mistakes but are willing to learn from them will help you as you build your knowledge in the field of personal finance. With so many products, services and information available on personal finances, you can be overwhelmed and unsure on what direction to take, but take a deep breath and over time you will find what works for you.