Debt Management – Analysis Paralysis

If debt is eating into your life, eroding your sanity then it is likely that you’re sacred and worried. You’re probably not even sure how you got into this situation. You know that you want out but you don’t know which way is out. At times it feels like you are running around in circles chasing your tail. When you do focus on the problem it just seems too enormous to know where to start. What? Where? When? How? All these questions go racing through you head and puts you in a spin.

Thinking about your debt problem too much can lead to a situation called analysis paralysis. I’ve seen this repeated over and over again and not just in relation to debt. What happens is that when someone is faced with a problem they tend to over think the situation. They over analyze every single aspect but in the end take no action because every action they think about taking they come up with ten reasons not to take it. Their thinking is like a constant battle between finding solutions and finding problems with those solutions. The net result is zero. No action gets taken and the problem still exists and in many cases the problem is even worse because of the time lag.

If this situation describes you or if you have experienced this first hand then don’t worry. I’m pretty sure we all have experienced it at some stage in our lives. I certainly know that I have and no doubt will do it again. By sitting there and thinking about a problem we feel like we are making progress and this would be correct up to a point. At a certain point we slip from constructively thinking about a problem to over analyzing it. When is that point reached? It’s hard to know but when you find yourself coming back to the same solutions over and over again and thinking the same thoughts you can be sure that your are stuck in the analysis paralysis loop.

The attractive thing about thinking and analyzing a problem is that it doesn’t really involve too much physical effort. By thinking about a problem in abstract you don’t have to get too involved and can avoid getting your hands dirty. The ironic thing about analyzing a problem to death is that the more you think about the problem the less likely you are to find a solution or at least a solution that you are happy with. Its fine and dandy to spend time thinking about the latest advances in budgeting software and how it will solve all your debt problems, but until you get up and take some action none of your debt problems will be solved.

With debt there is very rarely one grand solution that wipes away all your debt problems. It’s more the case that the solution to your debt problem is made up of lots of different smaller solutions that when combined prove effective. Looking for that grand solution that will solve your problems will likely be a waste of time. What you need to look for is lots of small and simple actions that you can take that will all contribute to solve your debt problems.

The great thing about smaller actions is that they are generally easier to take. As a result smaller actions can help you get out of the analysis paralysis funk. On top of that the smaller solutions usually involve forming positive habits that will serve you well into the future not just in the here and now. Smaller actions cost less in terms of both time and energy. They are generally simpler to implement and while on their own may not be as effective as you would like, combined with other small actions they can be a potent force. With small actions it’s a case of the ‘sum of the parts is greater that the whole’, in other words the small actions are best when combined with other small actions and in turn they are more effective than one grand action.

What small actions?

The key with small actions is to devise a list of actions that are suitable to you. Not what someone else thinks is suitable for you. You need to push yourself but not over exert because otherwise you will get annoyed when things don’t happen as fast as you would like.

So at this point I’m advising that you do actually sit down and think. No for too long though. Think about all the small things that you can do to improve your financial situation. Start writing them down – make a list. The things on the list can be miniscule actions like taking the coins in your pocket and placing them in a jar. Seriously. What we are looking for is a list of small reinforcing positive actions with each action feeding on the momentum of previous one. At some point you will reach a critical mass and have a breakthrough with your struggle with debt. This works - trust me.

Once you have made your list take the easiest item on the list and do it. No! Not the hardest item the easiest. You don’t go from learning to drive one day and competing in the Indy 500 the next? Take it easy. Remember the goal here is to get you out of the analysis paralysis funk and into a state of taking action however small.

Try to make it a fun experience and make sure to reward yourself when you complete each task. The rewards should be in proportion to the actions you take so if you honestly think that you took some serious action then give yourself a good reward. The reward shouldn’t be monetary. It could be something like watching reruns of your favorite TV show.

It’s easy to be seduced into thinking that you are making progress with your debt when you are thinking about it all day. It’s true that in order to physically go somewhere you need to go there in your head first i.e. see yourself in that place first and mentally prepare yourself for the journey. However every thought needs to be expressed in physical action so there is no point spending your entire time thinking and talking about something when you should just be out there doing it. Time waits for no one and the long you sit there thinking about something the further away it is moving.  So please don’t be all talk and no action when it comes to your debt.