HOW OVERTHINKING CAN COST YOU MONEY

Making a decision is part of everyday life. Overthinking is precisely what it means, thinking too much.

Overthinking is good in some situations, especially when it comes to human interaction. But this habit can also prevent you from taking action. It consumes your energy, disables your ability to make decisions, and puts you on a loop of thinking and thinking over and again. My parents have always said: “Think hard before you speak your mind.” That’s probably where I get the mentality from. I have learned that when making a decision which affect my financial well-being, facts will get me further.

Related: Does hard work guarantee success?

Not enough research.

Information plays a crucial role in decision making. Quality information can reduce uncertainty and allow you to make a better choice based on a different point of view. Imagine trying to decide whether to by a car and all you know is looks of the car and the price. Sometimes you can get away with it. Nine out of ten, you are probably going to regret your pick.

Being stuck with high monthly payment is an open road to credit card debt. When factoring in other information such as the highway mileages versus local, the overall cost of maintaining the vehicle such as oil change, or the car insurance, I am sure a more comfortable decision will be made knowing that you cover all the basics. Technologies are available within the palm of your hands. The smartphone allows us to obtain more information about the subjects that we are not familiar with. Take advantage of it.

Constantly comparing you with others.

Stop comparing your decision to everyone else’s. If you have done these in the past, you are not alone:

• Your roommate got a new iPhone, now you also want a new phone.
• Your neighbor got a brand-new car, now you are thinking it is time to trade in your car as well.

I once allowed these thoughts to wonder in my own head. I thought that buying the latest iPhone or a brand-new car would solve all my problems. I was wrong. Keep doing this to myself would not make me any happier than I already am. It only opens the path of financial destruction and heavy debt. The overall advice I want to give is to let it go. You have made the best decision with what you know. Leave it at that. Eventually, you will learn from your mistake and improve it next time. At least that’s what I hope for.

Not training your brain to think about what important

How often do we actually stop to think about which things in our lives really matter most? Let me explain this to you through a personal lesson that I have learned.

When I purchased my house back in 2016, it took me over 4 months to finally make a decision on it. I spent literally every day-off to go around with my realtor and visited as many listing as possible. I thought I have seen over 60 houses. What important to me at that time were:

• Small backyard
• Fairly new
• Close enough to the highway so I can just hop on and go to work
• Modern kitchen and is connected to the living room
• Big enough house for the right size family because it will attract more customers when it is time to sell.
• Turn-key: I wanted to move out as quickly as possible because I was having some issue with the current landlord.

I fell in love with it as soon as I walk in. It had all the basic things that I was looking for.

However, here are some other important things I wish I should have thought about:

• I didn’t need that big of a house. In the beginning, it was only me in a 5-bed room’s house.
• A bigger house means a little more down payment and monthly mortgage. I could have saved more money and put towards other investments.
• Higher utilities since I have to pay more for the heater and air conditioning
• Cost me more to furnish a bigger house. Even though I only furnished 3 out of the 5-bed rooms, I still think it cost me too much money.

Overall, I am happy with my choice, but it could have been better. I learned from my lesson.

Overthinking may lead to many health issues

Worrying may have a destructive effect on your health. Imagine coming back home from a long day of work, and you can’t fall asleep because you keep thinking about the decision that you have to make at work. Whether to let your boss know about the small mistake you made or deciding whether to fire an employee, thinking about it will not solve anything at the moment and make it harder for you to deal with it the next day. Losing sleep eventually affect your concentration at work.

Overthinking can also change the way you treat people around you. When you are not able to isolate yourself from your thought, it is harder to pay attention to what’s going on around you. The wrong decision comes from mental fatigue. Once you are tired from lack of sleep or not eating well, bad decision starts to happen. High blood pressure, canker sore, an ulcer can all result from overthinking. It can end up costing you more money and will further deteriorate your quality of life.

Take away points

I hope you find this blog useful. It is ok to take times and not being rushed. Learn how to say NO if you are not comfortable with your choice.