I read an interesting article about decision-making this week, based on the work of Harvard law professor Ellen Langer. Her theory is that in the modern age we suffer unnecessary stress through endless research and weighing up the pros and cons to try and reach a decision, which results in ‘anaylsis paralysis’. Instead, she suggests ‘taking a limited amount of information and choosing an option. Then, rather than worry about whether the decision was right, try to make it work. In other words, don’t try to make the right decision, make the decision right.’
As someone who often drives myself into a frenzy over big decisions, I found this approach eye-opening. Like many people, I find the panic of making the ‘wrong’ decision so debilitating that I will often delay making a call either way. Such procrastinating is in itself very stressful, because the pressure to make the decision still buzzes around in my head non-stop.
Langer’s belief that there is no right decision – just a bunch of possible scenarios, each of which you make the best of – is freeing. Firstly, it encourages you to jump into whichever decision you make with a positive attitude, rather than thinking ‘oh my god, I bet I have f**ked this up’ (and looking for any scrap of evidence to back up that negative assumption). Secondly, it removes a lot of the self-blame around decision-making: you didn’t make the wrong decision, because there wasn’t a right or wrong decision to choose. At a time of life when me and the people around me are making some pretty major decisions – should I have kids? Do I want to move out of London? Is the job I’ve been doing for a decade actually the right career for me? – taking this approach strikes me as the best option, especially when it’s impossible for an analytical cost/benefit analysis to ever truly resolve such choices.
But what about when you make a decision that objectively does have negative consequences? I struggle to be as chirpy as Langer, who says ‘The way I live my life is that I “fall up”’. For example, lots of people in my age bracket believe they made ‘bad’ decisions when it came to buying property – specifically one- or two-bed flats in London, bought at eye-watering prices as the market peaked in the early 2010s and now very difficult to sell when they need family-sized houses, or to move to new cities for work. Lots of my friends have either lost big chunks of money by selling their first-buys for less than they paid, or have now become unwilling landlords, paying more in mortgage fees than they receive in rent, all because they can’t shift those ‘investments’.
My own personal horror came when my husband and I spent ALL our money on our current flat – plus taxes – in 2020, then two days later the government announced it was scrapping stamp duty. It was, and still is, completely sickening to think of what we could have done with the fifteen grand we would’ve saved, like paying a year’s nursery fees or buying a secondhand family car. For a long time I was furious with myself that I hadn’t somehow foreseen the stamp duty holiday, and had been so very stupid as to ‘waste’ an amount of money that it would take us years and years to save up again.
This is where another dose of decision-making wisdom comes in, this time from none other than personal finance expert Martin Lewis. I listened to him on a podcast taking about the difference between a good decision and a good outcome when it comes to making financial choices, and how we can only make the best possible decision with the information available at the time. Apply this to my mates who scrimped and saved to buy property in 2014, and you see that they made a good decision, based on the fact property prices appeared to only be spiralling upwards, they needed somewhere to live, and no one could’ve predicted then that major factors such as Brexit and the pandemic would have a huge impact on demand. They may have suffered a bad outcome, at least financially, but that’s only possible to understand with hindsight. And very few of us have psychic powers.
Ditto my stamp duty drama – logically there’s no way I could possibly have known Rishi Sunak’s plans, and although it was extremely gutting, I shouldn’t feel like my personal failings as a decision-maker led me to dump £15k in the bin.
By combining Langer’s ‘turn your decision into the right decision’ approach with a commitment not to beating yourself up for good decisions with bad outcomes, I think you have a sure-fire route to not letting dilemmas drive you insane.
Now if I could just apply this to my own life, I’d be sorted.
I don't know if this is any comfort, but we bought a house during the stamp-duty holiday, and prices were really inflated. I've no doubt that our new house was over-priced to a level that wiped out any stamp-duty saving!