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Money Psychology
Money Psychology: Decision Fatigue
Think about how exhausted your body feels after a strenuous workout. Your brain runs a similar gauntlet on most days, making a continuous string of choice after choice. Each time you make another decision, your willpower and ability to make logical choices dwindles. This is called decision fatigue.
No matter how big or small the issue, the ability to make well-grounded judgments is weakened with every choice we make. This is why it may not be smart to make financial decisions or spend money late in the day.
How Does It Affect Me?
Decision fatigue can cause decision avoidance, impulse purchases, a lack of self-control and an inability to make trade-offs. Faced with so many different options, your brain eventually seeks to take the easy way out. This is because once your willpower begins to falter and the stress rises, your mind wants to escape the negative feelings ASAP.
Rather than choosing the sensible alternatives, you may go with the more expensive option just because it was the quickest. For situations involving a series of choices or big-ticket items, this can rapidly spiral out of control.
Here’s what you can do about it:
Rest Up - There’s a reason the advice to “sleep on” a decision has been around for so long. When you wake up after a good night’s sleep, your mind is more refreshed and thus in a better place to weigh pros and cons.
Prioritize Your Analysis - Organize your decisions so that you’re making the important choices first, while your motivation levels are high. This will lower the risk of decision fatigue impacting your finances.
Make Decisions Habitual - Build decisions into your schedule so they become habits. Establishing a routine decreases the number of random choices that need to be made. This way, small choices like when you’ll do your laundry can be made without much thought.
Don’t worry! There are plenty of ways to help stop your brain from making questionable choices while tired.
For more information on decision fatigue, read here.
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