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Overwhelmed By Too Many Choices? Here’s How To Simplify

Overwhelmed By Too Many Choices? Here’s How To Simplify

National Simplify Your Life week occurs during the first week of August and it reminds us that less is more.

Simplicity is an age-old practice. Proverbs 14 states that “the simple believes everything, but the prudent gives thought to his steps.” That is, an effective person prunes out the unnecessary in order to forge a better path. Islam teaches Muslims that there is “dignity in humility and grace in simplicity.”

Cut the clutter

Choice is good: We love freedom and choice gives us more. But at what point does too many options lead to complexity and stress? How often have you stopped at the grocery to buy a couple of items before eventually finding your shopping cart overstuffed with a dozen purchases. Supermarkets on average carry over 42,000 products, according to the Food Marketing Institute—reflecting the myriad choices we’re forced to make each day.

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“Paralysis is a consequence of having too many choices,” says psychologist Barry Schwartz in this popular Ted Talk presentation. Schwartz, who is the author of The Paradox of Choice, explains that too many options—i.e., complexity—lead to people feeling overwhelmed. And according to his research, that causes non-participation or delay in taking action.

Here are key considerations for simplifying your personal life.

1. Decide what matters (and what doesn’t)

Clutter prevents you from getting organized and being efficient. Simplifying is an exercise of prioritization—so as you focus on what’s important, you’ll ignore what doesn’t matter as much.

Be specific in what you’re trying to accomplish each day and remove all items and activities that serve as distractions. That may mean doing any of the following:

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  • Cancel irrelevant magazine subscriptions
  • Delete apps that waste your time
  • Consolidate your accounts
  • Unfollow people on social media who flood your feed
  • Limit your technology to ones that are actually useful
  • Use all-in-one applications that present most or all of your personal information
  • Donate or sell items that don’t add value
  • Eliminate clutter and organize useful belongings

If you need help, here’s a free app that prioritizes your goals and to-do lists in a priority matrix. And a similar app, Prioritize Me!, lets you select which of your goals are most important.

2. Focus on the 20 percent.

Follow the 80/20 rule which states that 80 percent of effects come from 20 percent of causes. In layman’s terms, that means 20 percent of your activities lead to 80 percent of your effectiveness. If you’re a homeowner, 20 percent of your possessions are associated with 80 percent of your activities. According to the National Association of Professional Organizers, we wear just 20 percent of our clothing. Perhaps it’d be prudent to donate or sell the rest.

If you want technology to help you simplify, the Tody app lets you organize and prioritize tasks. And to keep you on the right track, the mobile app will prompt you when a chore is due.

National Simplify Your Life Week
         July 2016 Capital One Simplify Your Life Survey (1,000+ U.S. respondents, ages 18-54)             

     3. Be practical.

    Love life and personal finances are the two most challenging areas to simplify, according to the July 2016 Simplify Your Life survey by Capital One. A majority (60 percent) of over a thousand respondents said a practical approach is the best way to simplify their finances:

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    • Practical (sensible and straightforward): 60%
    • Mindful (reflective and introspective): 14%
    • Optimistic (positive and hopeful): 14%
    • Ruthless (strict and unrelenting): 6%
    • Creative (unique and unexpected): 6%

    According to the same survey, 41 percent said a mobile app—with access to all account information—was their must-have tool. Most smartphones are littered with random apps. However. it’s essential to know which ones boost your productivity. For example, one tool that comes with Capital One’s Quicksilver and Venture cards and consolidates your account information is Capital One Wallet. It’s a mobile app that allows you to keep track of all your purchases in real-time.

    The paradigm of simplicity requires attention to important matters, and treats the rest as noise.

    National Simplify Your Life Week

      The takeaway

      When it comes to purchasing decisions, consumers often succumb to buyer’s remorse because of unmet expectations, says Schwartz. Moreover, people often have unrealistic beliefs that better alternatives exist—even if the original selection of a product was a great one.

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      Our gadgets and possessions should guide us toward our goals rather than distract and steal our precious time. It’s interesting to note that in the Simplify Your Life survey, only 6 percent of Americans surveyed said that creativity is the best approach to simplifying their financial lives.

      So forget the fancy methods. Rather, do the important stuff and weed out what no longer needs to be done.

      Featured photo credit: Stokpic.com via stokpic.com

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      Marvin Dumont

      Entrepreneur, Disruptor

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      Last Updated on September 2, 2020

      How to Set Financial Goals and Actually Meet Them

      How to Set Financial Goals and Actually Meet Them

      Personal finances can push anyone to the point of extreme anxiety and worry. Easier said than done, planning finances is not an egg meant for everyone’s basket. That’s why most of us are often living pay check to pay check. But did anyone tell you that it is actually not a tough task to meet your financial goals?

      In this article, we will explore ways to set financial goals and actually meet them with ease.

      4 Steps to Setting Financial Goals

      Though setting financial goals might seem to be a daunting task, if one has the will and clarity of thought, it is rather easy. Try using these steps to get you started.

      1. Be Clear About the Objectives

      Any goal without a clear objective is nothing more than a pipe dream, and this couldn’t be more true for financial matters.

      It is often said that savings is nothing but deferred consumption. Therefore, if you are saving today, then you should be crystal clear about what it’s for. It could be anything, including your child’s education, retirement, marriage, that dream vacation, fancy car, etc.

      Once the objective is clear, put a monetary value to that objective and the time frame. The important point at this step of goal setting is to list all the objectives that you foresee in the future and put a value to each.

      2. Keep Goals Realistic

      It’s good to be an optimistic person but being a Pollyanna is not desirable. Similarly, while it might be a good thing to keep your financial goals a bit aggressive, going beyond what you can realistically achieve will definitely hurt your chances of making meaningful progress.

      It’s important that you keep your goals realistic, as it will help you stay the course and keep you motivated throughout the journey.

      3. Account for Inflation

      Ronald Reagan once said: “Inflation is as violent as a mugger, as frightening as an armed robber and as deadly as a hitman.” This quote sums up what inflation could do your financial goals.

      Therefore, account for inflation[1] whenever you are putting a monetary value to a financial objective that is far into the future.

      For example, if one of your financial goal is your son’s college education, which is 15 years from now, then inflation would increase the monetary burden by more than 50% if inflation is a mere 3%. Always account for this to avoid falling short of your goals.

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      4. Short Term Vs Long Term

      Just like every calorie is not the same, the approach to achieving every financial goal will not be the same. It’s important to bifurcate goals into short-term and long-term.

      As a rule of thumb, any financial goal that is due in next 3 years should be termed as a short-term goal. Any longer duration goals are to be classified as long-term goals. This bifurcation of goals into short-term vs long-term will help in choosing the right investment instrument to achieve them.

      By now, you should be ready with your list of financial goals. Now, it’s time to go all out and achieve them.

      How to Achieve Your Financial Goals

      Whenever we talk about chasing any financial goal, it is usually a two-step process:

      • Ensuring healthy savings
      • Making smart investments

      You will need to save enough and invest those savings wisely so that they grow over a period of time to help you achieve goals.

      Ensuring Healthy Savings

      Self-realization is the best form of realization, and unless you decide what your current financial position is, you aren’t heading anywhere.

      This is the focal point from where you start your journey of achieving financial goals.

      1. Track Expenses

      The first and the foremost thing to be done is to track your spending. Use any of the expense tracking mobile apps to record your expenses. Once you start doing it diligently, you will be surprised by how small expenses add up to a sizable amount.

      Also categorize those expenses into different buckets so that you know which bucket is eating most of your pay check. This record keeping will pave the way for cutting down on un-wanted expenses and pumping up your savings rate.

      If you’re not sure where to start when tracking expenses, this article may be able to help.

      2. Pay Yourself First

      Generally, savings come after all the expenses have been taken care of. This is a classic mistake when setting financial goals. We pay ourselves last!

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      Ideally, this should be planned upside down. We should be paying ourselves first and then to the world, i.e. we should be taking out the planned saving amount first and manage all the expenses from the rest.

      The best way to actually implement this is to put the savings on automatic mode, i.e. money flowing automatically into different financial instruments (mutual funds, retirement accounts, etc) every month.

      Taking the automatic route will help release some control and compel us to manage what’s left, increasing the savings rate.

      3. Make a Plan and Vow to Stick With It

      Learning to create a budget is the best way to get around the uncertainty that financial plans always pose. Decide in advance how spending has to be organized

      Nowadays, several money management apps can help you do this automatically.

      At first, you may not be able to stick to your plans completely, but don’t let that become a reason why you stop budgeting entirely.

      Make use of technology solutions you like. Explore options and alternatives that let you make use of the available wallet options, and choose the one that suits you the most. In time, you will get accustomed to making use of these solutions.

      You will find that they make it simpler for you to follow your plan, which would have been difficult otherwise.

      4. Make Savings a Habit and Not a Goal

      In the book Nudge, authors Richard Thaler and Cass Sunstein advocate that, in order to achieve any goal, it should be broken down into habits since habits are more intuitive for people to adapt to.

      Make savings a habit rather than a goal. While it might seem to be counterintuitive to many, there are some deft ways of doing it. For example:

      • Always eat out (if at all) during weekdays rather than weekends. Weekends are more expensive.
      • If you are a travel buff, try to travel during off-season. You’ll spend significantly less.
      • If you go shopping, always look out for coupons and see where can you get the best deal.

      The key point is to imbibe the action that results in savings rather than on the savings itself, which is the outcome. Focusing on the outcome will bring out the feeling of sacrifice, which will be harder to sustain over a period of time.

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      5. Talk About It

      Sticking to the saving schedule (to achieve financial goals) is not an easy journey. There will be many distractions from those who are not aligned with your mission.

      Therefore, in order to stay the course, surround yourself with people who are also on the same bandwagon. Daily discussions with them will keep you motivated to move forward.

      6. Maintain a Journal

      For some people, writing helps a great deal in making sure that they achieve what they plan.

      If you are one of them, maintain a proper journal, where you write down your goals and also jot down the extent to which you managed to meet them. This will help you in reviewing how far you have come and which goals you have met.

      When you have a written commitment on paper, you are going to feel more energized to follow the plan and stick to it. Moreover, it is going to be a lot easier for you to track your progress.

      Making Smart Investments

      Savings by themselves don’t take anyone too far. However, savings, when invested wisely, can do wonders.

      1. Consult a Financial Advisor

      Investment doesn’t come naturally to most of us, so it’s wise to consult a financial advisor.

      Talk to him/her about your financial goals and savings, and then seek advice for the best investment instruments to achieve your goals.

      2. Choose Your Investment Instrument Wisely

      Though your financial advisor will suggest the best investment instruments, it doesn’t hurt to know a bit about the common ones, like a savings account, Roth IRA, and others.

      Just like “no one is born a criminal,” no investment instrument is bad or good. It is the application of that instrument that makes all the difference[2].

      As a general rule, for all your short-term financial goals, choose an investment instrument that has debt nature, for example fixed deposits, debt mutual funds, etc. The reason for going for debt instruments is that chances of capital loss is less compared to equity instruments.

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      3. Compounding Is the Eighth Wonder

      Einstein once remarked about compounding:

      “Compound interest is the eighth wonder of the world. He who understands it, earns it… He who doesn’t… Pays it.”

      Use compound interest when setting financial goals

        Make friends with this wonder kid. The sooner you become friends with it, the quicker you will reach closer to your financial goals.

        Start saving early so that time is on your side to help you bear the fruits of compounding.

        4. Measure, Measure, Measure

        All of us do good when it comes to earning more per month but fail miserably when it comes to measuring the investments and taking stock of how our investments are doing.

        If we don’t measure progress at the right times, we are shooting in the dark. We won’t know if our saving rate is appropriate or not, whether the financial advisor is doing a decent job, or whether we are moving closer to our target.

        Measure everything. If you can’t measure it all yourself, ask your financial advisor to do it for you. But do it!

        The Bottom Line

        Managing your extra money to achieve your short and long-term financial goals

        and live a debt-free life is doable for anyone who is willing to put in the time and effort. Use the tips above to get you started on your path to setting financial goals.

        More Tips on Financial Goals

        Featured photo credit: Micheile Henderson via unsplash.com

        Reference

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