Financial planning may seem overwhelming with various complexities, but at its core, it’s about doing what we already know we should be doing. This includes tasks such as getting a will done, insuring catastrophic risks, saving money for the future, and eliminating high-interest debt. While these actions don’t guarantee financial success, they can put us in a good position. So why do we often procrastinate on these important tasks?
The main reason we hesitate to take action is that we tend to act only when the pain of not doing something becomes greater than the pain of doing it. Estate planning, in particular, involves facing the prospect of our own mortality, making difficult decisions, and dealing with legalities, all of which can be daunting tasks. The perceived and real pain associated with getting a will done can be a deterrent for many people, leading to a high percentage of individuals not having estate planning documents in place.
The consequences of not having a will done may not be immediately felt by us, as it’s mostly perceived pain that our loved ones would have to endure. This includes potential disputes over asset distribution and the care of minor children. By procrastinating on estate planning, we may feel like negligent and irresponsible adults. However, the true impact of not having these documents in place may not be fully realized until it’s too late.
To better understand the impact of imagined pain and the joy that could come from completing important financial tasks, we can use Alex Hormozi’s “Value Equation.” By weighing the effort and sacrifice required to complete tasks against the potential benefits and outcomes, we can assess the value of taking action. The joy of completing estate planning documents, such as providing for our family and leaving a legacy, can outweigh the pain associated with the process.
By making the unconscious conscious and examining the pain ratio and tipping point that would prompt us to take action, we can improve our financial decision-making. Utilizing our imagination to envision the value of completing financial tasks, such as estate planning, can help us prioritize and act on important matters. While we may never have complete control over how our heirs respond to our plans, thorough estate planning and communication can increase the likelihood of our wishes being carried out.
In conclusion, financial planning is not just about ticking off boxes on a checklist, but about understanding the impact of our decisions and taking action. By recognizing the value of completing important tasks like estate planning, we can overcome procrastination and enhance our financial well-being. It’s not just about getting a will done, but about making conscious choices that will benefit ourselves and our loved ones in the long run.
