Let me share a few examples where inertia has held me back.
- When we first started investing we decided to open an account where my 401K was also held because I already knew how to access the system, even though the investment options were limited and didn't include Vanguard funds that we wanted to invest in.
- I have had some company stock for a few years now, that I wasn't sure how to handle when it came to taxes. It's taken over 2 years for us to finally find an accountant to help us sort this out, and now we're at the point that we may just eat the extra taxes and sell anyways. Had we figured this out a year ago we could have saved 8%.
- When my husband (fiance at the time) first started his job, he was automatically enrolled to contribute 3% of his salary to his 401K. In took about a year for him to finally increase his contribution amount.
- It took me about 3 years at my first job to finally open up a 401K. My boss got to the point where she was threatening to not pay me my commission if I didn't open one up. I felt like I shouldn't given I was in so much debt, and it was completely foreign to me.
Think about how much money I've wasted by simply giving in to inertia. I fret over spending an extra $5 on coffee, but have walked away from thousands of dollars by doing nothing. That really helps to put some of my decisions into perspective I think inertia can actually explain one of the reasons that we tend to be penny smart and pound stupid. It's simply easier to try to spend less on small transactions in our life than it is to spend the necessary time to research large decisions, weigh our options and finally move forward with a change that will have a huge financial impact.
But while this realization can be sobering, I think putting pen to paper and documenting some of these missed opportunities is actually a bit encouraging. Right now my husband and I are trying to make some big financial decisions and the fear of making the wrong one can be overwhelming. We don't want to be too conservative and miss out on great opportunities, but we also don't want to take on too much risk and wind up losing a large portion of what we have. As much as we like to create charts and plan extensively, the truth is that we can't predict the future and so making the "right" decision is likely impossible.
But look at all of the poor decisions we've made, and how far we've come! Even despite giving into inertia, we've been able to achieve more than we ever thought possible, and we continually get better and better at fighting the temptation to simply do nothing.
If you've suffered from financial inertia like me, try to overcome it. Create a list of those tasks you've been putting off, and schedule one a week on your calendar. Just force yourself to take on one at a time, and once you get a few under your belt, that inertia will start to work in your favor. You'll see that figuring this stuff out isn't as insurmountable as you thought, and tackling these tasks will make you feel in control of your finances and your destiny.
But if you have a few inertia regrets, don't beat yourself up about it. It's impossible to maximize all of our financial transactions, and every one of us has suffered from inertia caused poor decisions at one time or another.