DECISION making is tough given today’s hectic lifestyles and 24/7 information overload. As my friend, certified financial planner Carl Richards, says in his excellent book, “The Behavior Gap—Simple Ways to Stop Doing Dumb Things with Money,” we all have things we want to do, need to do and ought to do.
Deep down, we know we need to make important life decisions, like updating investment portfolios, creating estate plans or crafting a college savings strategy. All of these are hard work, take time and are nobody’s idea of fun.
Still, maybe your New Year’s resolution for 2012 was to tackle one or more of these tasks or something equally important to your family’s financial future. If you’re like most, you’re probably sitting here with the year three-quarters gone with nothing to show but good intentions. It’s not that we’re lazy or don’t care. It’s just there always seems to be a host of other day-to-day demands that feel more urgent and have to be addressed — right now.
How do we break this cycle of important tasks being pushed to the wayside? Richards suggests it is very helpful to distinguish between tasks that are urgent (pressing, immediate) and tasks that are actually important (fundamental to our goals).
Some tasks are both urgent and important. These belong at the top of your list. Others seem urgent, but are not so important. Still others are important, but not so urgent.
The urgent/not important tasks will typically get done. Maybe you know someone who religiously devotes time each day to keeping up with Facebook updates, but has no savings or retirement plan.
The upshot is tasks that are important, but not urgent, fall to the bottom of the list and usually stay there. As Richards says, “on a day-to-day basis it’s easier to focus on the urgent stuff, leaving the non-urgent but important stuff to wait.”
This can lead to big problems. The important stuff will eventually become urgent. By then it may be too late. I can attest 18 years goes by in a blink of the eye. You don’t want to wait until your son or daughter is in high school to start thinking about how to pay for college.
Richards suggests scheduling time each month to tackle these important, but seemingly non-urgent tasks.
Don’t give in to temptation to put them off until next month.
He closes by saying large-scale financial crises can be hard to predict, let alone prevent. However, a personal financial crisis is almost inevitable unless you address the truly important tasks in your life before they become urgent.
Mickey Kim is the chief operating officer and chief compliance officer of Columbus-based investment adviser Kirr Marbach & Co. He can be reached at 376-9444 or firstname.lastname@example.org.