Using “Decisive” for your decisions

The older I get, the more complicated my life gets — and the harder it is for me to make decisions. Do we have anything in common there?

By far, the most complicating factor has been having children. Not that that's a bad thing. It's not bad, just … complicated. And since we just added another child about two weeks ago, we're adjusting to less sleep and more laundry. So kids = sometimes hard decisions. For example, here are a few of the decisions that we've considered since having children:

But the decisions extend beyond money, too. How do we manage our time? In the middle of adjusting to a newborn, we are still in the middle of a huge remodeling project on our fixer-upper. What sane person decides to replace the siding, windows, wiring, and insulation in the middle of major life changes? We are doing it, but our sanity should be questioned.

Anyway, so I find myself a little overwhelmed with making the best possible decision for my (and my family's situation).

Enter Decisive by Chip and Dan Heath. The subtitle of the book is How to Make Better Decisions in Life and Work. If that doesn't sound like what I need (and maybe you, too?), I don't know what does.

I loved the book and wanted to share a few things I learned from it.

Agonizing over decisions?

The authors describe four “villains” to decision-making.

  • First, we define our decisions too narrowly. For example, as we were preparing to have children, I first asked myself: Should I quit my full-time job or keep it? Two options. The authors say that often, we should be asking ourselves broader questions and broadening our options. Should I stay full-time? Quit completely? See if working part-time is a possibility? Maybe my husband should cut his hours or work from home two days a week.
  • Second, we — all of us — suffer from “confirmation bias.” As they discuss in the book, “Our normal habit in life is to develop a quick belief about a situation and then seek out information that bolsters our belief.” Uh oh. So we deliberately seek information that supports what we think already, huh? We think we're making good decisions, but we probably aren't making the best decisions if we unconsciously sought what we wanted anyway.
  • Third, short-term emotion affects our decision-making abilities. Sometimes we need to detach ourselves from the situation to gain some perspective.
  • The last villain is overconfidence or assuming that we know more than we really do about what the future holds. This is one that some readers took issue with when I wrote about our smaller retirement savings. Just because we think we're doing okay doesn't mean our retirement savings won't be obliterated by an accident or disability.

Decision-making tips

So how do we make smart decisions anyway?

  • To counteract the narrow framing, widen your options. Are there more than two choices? Is there a better way? And another way, take away all current options and force yourself to think of new options. But don't have too many options. Studies have shown that having too many options doesn't improve the decision-making process. You can also look for others who have already solved your problem. One of my favorite things they recommended was looking at yourself when you did do things well. For instance, if you had several days in a month when you didn't spend money impulsively, analyze what was different about those days compared to the days you did spend impulsively.
  • For confirmation-bias, you need to test your assumptions against reality. Instead of looking at the option you want, you may want to consider the opposite — or find someone who disagrees with you. They also discuss zooming in and zooming out on certain situations. By zooming in, we're looking at a close-up, and by zooming out, we're taking more of an outsider's perspective. And I learned a new word by reading this book: “ooching.” “Ooching” means to test your hypothesis by creating a mini-experiment. A swimming example is to dip one toe into the water to test it before diving in.
  • Find a way to become detached from your short-term emotions. Another excellent strategy they offer is the 10/10/10 strategy. When faced with a decision, ask yourself how you will feel about your decision 10 minutes from now, 10 months from now, and 10 years from now. We like what's familiar to us, so even though not all personal finance advice is applicable to us, we are more comfortable with what we've heard most often. To combat this, try looking at the situation from the perspective of an uninvolved observer (or, think about what you would tell your best friend to do if she were facing a similar situation, and why). Think about your priorities and honor them.
  • Since no one can know the future, prepare to be wrong about the future. The authors talk about a tripwire, something you put in place that causes you to evaluate past decisions. I think this one may be particularly valuable in past financial decisions, because it prevents status quo. To prevent overconfidence, they mention considering a range of possible outcomes, both good and bad: What's the worst thing that can happen? What's the best? A premortem is to consider that your decision has totally tanked. By asking yourself why your decision was theoretically a bad one, it forces you to face your overconfidence.

This book was full of interesting stories and case studies. I found its premise to be very helpful as I personally navigate a lot of important decisions.

Do you have any tricks to avoid decision paralysis? Do you think you make good decisions generally and, if so, how do you think you accomplish this?

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Seth at Ectopistes
Seth at Ectopistes
6 years ago

I’ll second the idea of bouncing ideas or issues off of someone else. This not only has the benefit of including their insights and outside knowledge, but also forces you to voice or frame the issue in a clear manner. Even if you’re just speaking to your dog it can help to talk it out.

nicoleandmaggie
nicoleandmaggie
6 years ago

Those decision-making tips seem like they would increase rather than decrease decision paralysis. What am I missing?

El Nerdo
El Nerdo
6 years ago

The book is not about making decisions quickly but about deciding well. While Malcolm Gladwell’s “Blink” paradigm requires expertise, what do you do when you have zero experience and can’t “think without thinking”? When the light turns red, stop. When you’re offered your first job overseas, you’ll likely have to think about it– this book offers a framework to do that correctly. There are many excellent examples in the book, from figuring out 18th-century career moves to setting up the price for buying and selling Redbox shares, to deciding what kind of cancer treatment a person should get, to how… Read more »

nicoleandmaggie
nicoleandmaggie
6 years ago
Reply to  El Nerdo

That’s not how this post is framed though…

For me, I need more advice about satisficing than I do about optimizing. If you try to optimize too much you never actually push the button. (Or, as Voltaire says, “The perfect is the enemy of the good.”)

El Nerdo
El Nerdo
6 years ago

Right Nicole, I hear you. This is a business manual though. You can use its tools to satisfy, optimize, maximize, or whatever end you choose. The book starts by looking at the decision-making process of many businesses and institutions: do a 10-minute confirmation-bias power-point during a staff meeting and ask everyone to fall in line. Then the authors ask– what would you think if people were tried in court in the same way? An yet, this is how many people make major purchases, choose a major, decide to marry, or pick an investment. The book covers a lot of ground–… Read more »

Lisa Aberle
Lisa Aberle
6 years ago

I am afraid of making the wrong decision, which is where my decision paralysis comes in. The process described in the book is supposed to help you make better decisions (so then I am less afraid of making the wrong decision).
I know this review doesn’t come close to describing how great the book is, so you should check out the real thing!

nicoleandmaggie
nicoleandmaggie
6 years ago
Reply to  Lisa Aberle

You would probably benefit from reading The Paradox of Choice if you haven’t already. http://amzn.to/1oAVa9L

Brian @ Luke1428
Brian @ Luke1428
6 years ago

While I’m sure some of the readers here will disagree with this, I’ve found prayer to be a vital component in my life to making wise decisions and breaking the paralysis in my mind.

phoenix1920
phoenix1920
6 years ago

While I am a huge believer in prayer, I am not sure it is useful for a lot of the decisions, like whether I should save more for the future or create family memories now through vacations. When I had to decide about the best childcare for my infant, I turned to research first, and then prayer–particularly when I suffered from the typical “new mom worries.”

I don’t think prayer should replace research and questioning yourself and looking to hear other perspectives, but is more of a compliment to the entire process.

Jon @ Money Smart Guides
Jon @ Money Smart Guides
6 years ago

It’s important to take into account all options. I’ve gotten better at this as I’ve become older. The younger me would just pick between A and B. Now I look at A and B, but see if there is some combination of the two that I am overlooking. Mann times, a decision isn’t just A or B and the real answer lies somewhere in the middle.

Babs
Babs
6 years ago

Congratulations!

Lisa Aberle
Lisa Aberle
6 years ago
Reply to  Babs

Thank you, Babs! The whole family is smitten with the smallest Aberle. I could go on and on, but I’ll stop :).

Money Saving
Money Saving
6 years ago

I like the tip around considering broader options. Whenever my wife and I are making a big decision, we often find that we really have a choice of nearly endless combinations. Too often, we do focus on such a narrow black/white type of scenario when there are literally thousands of options out there.

The best thing I like about getting closer and closer to financial independence is that it literally makes your options grow exponentially vs. someone that is living paycheck to paycheck.

Carole
Carole
6 years ago

After making a decision that is unalterable, go with it and don’t look back and second guess yourself. That is a way to become a miserable person.

Lisa Aberle
Lisa Aberle
6 years ago
Reply to  Carole

What if you looked back, not to second guess yourself, but to improve your decisions for the future?

phoenix1920
phoenix1920
6 years ago
Reply to  Carole

How many unalterable decisions are there? Suicide is the only one I can think of.

BD
BD
6 years ago
Reply to  phoenix1920

There are many decisions that are either very difficult to alter, or decisions that can be altered, but not after much emotional, physical and financial damage has been sustained. I know. I’ve had two major decisions go life-altering wrong, and the damage has been immense. The clean-up and alteration has taken over a decade and been near-impossible, as well as too little, too late (wrong career choice, wrong husband).

So in these cases, they almost might as well be “unalterable”, taking into account all the time and damages associated with them, along with the very small belated benefit of alteration.

slccom
slccom
6 years ago
Reply to  phoenix1920

It is also kind of hard to return the new baby…

Kenny
Kenny
6 years ago

I am much older than having the challenge of a new baby, but had them, took care of them, and made a lot more good than bad/OK decisions. A lot of the ‘decisiveness’ comes since a lot of the Western Civilization has become one of ‘instant decisions’ or ‘near term decisions’. There is tremendous pressure put on a human when “planning is not done and now it is decision time’. I am a planner at heart, mind and soul. I am doing retirement planning for 10 years+ while working full time and operating a business. Why? Cause those decisions and… Read more »

Big-D
Big-D
6 years ago

I find it the opposite, as I get older, the decisions are easier. I research decisions, thus when I know a lot about a lot I can make educated decisions much quicker. When I know nothing about retirement, I researched the heck out of it. When I already had 6 retirement accounts, making decisions (even sweeping ones) are easy and done with out regret.

Carla
Carla
6 years ago

The older I get, the harder it is for me to make decisions. I have made a lot of mistakes in my younger years (35 now) that still affect me to this day and the choices I am faced are in some ways more life changing than before. I am also diagnosed with cognitive dysfunction that affects my executive function so that is a factor when it comes to making decisions. I know comment #3 is probably a bit controversial in the PF crowd, but it has been helpful me when there are questions that don’t have a mathematical answer.… Read more »

phoenix1920
phoenix1920
6 years ago

Love this article. I think confirmation bias is particularly tricky. And often with sites like this, it is easy to spring up. Most people here are have very frugal mindset, so questioning whether certain expenses are necessary will have a definite tilt on sites like this one. It is important to seek out the opposite view to determine whether you have considered all of the necessary info.

James Salmons
James Salmons
6 years ago

Widening our perspective to a broader list of options is certainly an important suggestion for dealing with many issues, including our financial decisions. But so is broadening our perspective of the problem we are solving as well. I was reminded as I read this post of a time when I was with a group of five or six people who were discussing how to deal with a rather challenging situation. After about twenty minutes of exploring different possibilities someone asked a question that eliminated all the answers we had discussed. The problem revolved around the use of a piece of… Read more »

Meg P
Meg P
6 years ago

Some interesting NPR articles RE humand behaviour, information digestion and decision making:

“http://www.npr.org/blogs/health/2014/07/28/333945706/why-we-think-ignorance-is-bliss-even-when-it-hurts-our-health”

“http://www.npr.org/blogs/health/2014/07/21/332074963/what-the-odds-fail-to-capture-when-a-health-crisis-hits”

Prudence Debtfree
Prudence Debtfree
6 years ago

I can’t quite get past the fact that you had a baby two weeks ago and you wrote this! Congratulations on the addition to your family:)
I love the bit about not defining our options too narrowly. It’s such a good thing that we aren’t limited to option A or option Z – there are all of those other options in between. And this means that changes don’t have to be drastic – which can be intimidating – but subtle and manageable.
All the best with your family and your renovations. And your sleep!

imelda
imelda
6 years ago

I have to say I found this post very unhelpful. Nothing against the writer – but these strategies will not solve my indecisiveness problem. As another commenter said, expanding your choices only worsens the paralysis. And the other three tips are things I already try to do. All that thinking keeps me from making up my mind.

In fairness to the Heaths, I’ve read another book of theirs and found them excellent, very thorough and enlightening. I suspect that this post has not done their book justice.

Lisa Aberle
Lisa Aberle
6 years ago
Reply to  imelda

Sorry you didn’t like the post, but definitely don’t let that stop you from reading the book. If you like their other books, you will LOVE this one. It’s really amazing.

thegirlintheafternoon
thegirlintheafternoon
6 years ago
Reply to  imelda

One strategy the book outlines that this post doesn’t mention is the idea of considering conditions what must be true for a given option to be the best one. Instead of “is A better than B better than C?” I can say, well, A is best if these things are true, B is best if these other things are true, and C is best if that set of things over there is true. It doesn’t change the options themselves, either in number or in quality, but it changes the way I look at those options – it removes some of… Read more »

Green Girl Success
Green Girl Success
6 years ago

I don’t have children, but I can talk from my experience with my siblings. Yes, save for college for them. No, don’t buy them a car. When my brother and I were young, my dad made us earn anything beyond the basics. For example, if I wanted to drive his car I had to pay for my insurance and gas. My sister comes along 11 years later when they have more money and they give her everything and spoil her. Now, she is 30 and they are still giving her money and she doesn’t know how to budget, but my… Read more »

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