Our lack of self-control is akin to procrastination which refers to our tendency to delay unpleasant but important acts. Completing your tax return, switching to a cheaper insurance policy, having that uncomfortable conversation. We’ve all heard that procrastination is the enemy of success, but why is procrastination bad? Why is it the enemy of time?

1. When procrastination gets a bad name
2. Decision fatigue
3. Procrastinating your retirement savings
4. The divide in education
5. How to overcome procrastination

While procrastination looks like laziness, it is often just mental exhaustion at play. I never thought I’d defend procrastination, but here it goes….

You probably already know that Barack Obama and Mark Zuckerberg wear the same thing every day. By having a routine and dressing the same each day, you save time making decisions. This means you’ll have more mental energy to focus on advantageous opportunities and personal growth.

A famous example of decision fatigue comes from a study that examined the decisions made by parole boards at Israeli prisons. The researchers found that judges were more likely to issue favourable decisions to prisoners seeking parole if the cases were heard early in the day. The prospect of a favourable judgement declined as the morning progressed but improved after a break for rest and food. The easy option, which is keeping the prisoners in jail, is sticking to the status quo.

The consequences of decision fatigue are partly explained by going back to the start, System 1 and System 2. As a recap, System 1 (fast thinking) is our intuition while System 2 (slow thinking) is deliberate. System 2 is better for complex situations that require careful consideration. However, we’re not the best at recognising such situations and thus often misapply System 1. Resource depletion (i.e. decision fatigue) enhances the role of System 1 by limiting the deliberate overriding role of System 2.

Choice deferral is merely a sly way of referring to procrastination – and resource depletion (or decision fatigue) makes us more susceptible to avoiding making a decision.

By design, saving for your retirement is difficult to accept. It’s choosing something boring that won’t pay off for decades, over something that can bring immediate gratification. And there’s always the argument that you might not live to see your retirement, so rather spend your money when you’re alive. I get it. But the reality of increasing longevity means you cannot afford putting off saving for your retirement for one day longer.

Whenever we decide to do something, we’re deciding to not do something else (opportunity cost). Thus, we need to decide which tasks to devote our time to and which to simply skim over. Let’s use the Eisenhower decision matrix to help us:

Hopefully I’ve convinced you that saving for your retirement is urgent. Never forget compound interest! The next step is for you decide whether you think it’s important or not. If you do, then great, go do it now. If you don’t, I can live with that. Get a financial planner to do it for you. In many cases, getting a financial planner is a preferable option anyway. This is not a pleasurable task. You’ll find many reasons not to do it. And most of us lack the understanding of all the parts (i.e. tax efficiency, estate planning, diversification, fees, to name a few) to do it in the most optimal and efficient manner.

I’m happy for you to forego reading this post to the end if you rather want to take the time to make an appointment (a Certified Financial Planner (CFP) please, check their accreditation).

To manage your limited willpower, you need to create a routine for yourself. Free up your mental energy so you have more available for when you really need it. Find out what recharges you. For me, that’s exercising and getting enough sleep.

Eliminate distractions. For me, again, that means switching off the wifi when I need to work on a challenging piece of writing. And deleting subscriptions to any advertising emails (If I’ve used up all my willpower and see that advertising email come, I’ll be less susceptible to resisting it.)

We need to remove temptation and not give our impulses any power. Don’t keep the food you’re trying to avoid eating in the house.

Another effective approach is to set deadlines. But self-imposed deadlines will only work if the task is broken down into smaller achievable parts, each with its own deadline. (How do you eat an elephant?)

If accountability works for you, tell everyone who’ll listen what you’re planning to do. Why do you think I did an announcement on all social media platforms that I was going to write a series of posts on behavioural biases? Because I knew I wouldn’t get round to doing it unless I made a public commitment to do so (I take my own medicine).

• Heuristics and biases in decision making – This was the first post in the series which shares some behavioural economics research. Specifically, the heuristics and biases that influence our relationship with money. It uses System 1 and System 2 thinking examples from Daniel Kahneman’s New York Times best selling book, Thinking Fast and Slow, to help us be more conscious of the workings of our brain. 

• Mirror, mirror, on the wall, stop telling me I’m wonderful – This post focuses on the impact of overconfidence bias in decision making. It introduces the illusion of knowledge bias and the illusion of control bias to illustrate the difference between confidence and carelessness. It also discusses the better than average effect, the self-serving bias and fundamental attribution error. You’ll learn how to confront some unpalatable truths and get out of any false sense of comfort (if you’re up for the challenge?).

• Why you can’t argue with a vegan – Ballsy title, we know. But if you read the post you’ll (hopefully) understand why. We’ll be discussing confirmation bias. It’s one of those psychological biases that you can see everywhere. We’ll also touch on cognitive dissonance theory. We all struggle with these biases. They’re both humorous and serious. But because of that, it’s useful to know how to avoid confirmation bias when you need to.

• Size does matter… when it comes to framing – This post uses framing effect examples to show how framing bias influences the way we interpret information and make decisions. We discuss glossing, the compromise effect, and how the size of the frame can influence the volatility of your investment portfolio.

• Loss aversion vs risk aversion – Once you understand framing, you’re ready for this post. It introduces an incredibly powerful bias known as loss aversion. It also touches on prospect theory, the disposition effect and impression management.

• Anchors pulling you down? – Anchoring bias is a straightforward behavioural bias that causes us to focus on a certain initial value and then make decisions with reference to it. This post looks at some examples of this anchoring effect.

• The danger of the default – Default options nudge us to make better decisions. The option of opting out also respects freedom of choice. This post unpacks this notion of libertarian paternalism and the perils of status quo bias.

• Regret, it’s not a nice feeling – Regret influences the decisions we make and pushes us to conform to social norms. Examples of regret avoidance show us how this makes complete sense yet no sense at all.

• When the past influences the future – The Concorde effect is a famous example of sunk cost investment. Too often we invest time, money and energy into something we should’ve just abandoned. This post looks at some examples of how sunk cost fallacy affects our human decision processes.

• What’s mine is more valuable – In this post, you’ll learn why you place extra value on things you own. The endowment effect has implications for our investment portfolio, bonuses and consumer behaviour.

• How to improve self-control – Self-control is an essential life skill. It’s what separates humans from the rest of the animal kingdom. Learn how to improve self-control to achieve your long-term goals.

• The problem with wanting it now – When you delay instant gratification, you will experience long-term satisfaction. It’s the hyperbolic vs exponential discounting debate. Don’t let present bias win!

• The power of first impressions – The order of information influences your decisions. First impressions matter! It’s all got to do with primacy and recency effects.

• We prefer wrong information to no information – Availability bias and survivorship bias influence our decision-making. We make decisions based on the information available to us.

• Learn to deal with uncertainty – Risk and uncertainty will always surround us. Gambler’s Fallacy, the hot-hand effect, the law of small numbers & ambiguity aversion are just some of the biases that arise because of it.

• Stop stereotyping – Representativeness heuristic refers to the fact that we stereotype. It’s a mental shortcut. But beware of making unfounded comparisons.

• Mental Accounting – Money is money! Or is it? Mental accounting says we place different values on different money which leads to irrational decision making.

• Money Illusion– Money illusion is a sneaky bias. It causes us to focus on the amount of money in our hands, rather than it’s purchasing power.

• Home bias – We invest close to home and in what we know. But this lack of diversification results in missed opportunities. Say hello to ‘home bias’.

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