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That First Step

Kelechi Iwuaba

I WAS IN NEW YORK visiting my sister a few weeks ago when I saw a sign that read “Delay = Denial.” For me, that simple yet profound statement immediately struck a chord.

The sign was referring to climate change. Yet I could see how this plays out in other areas of my life. I began asking myself, what causes us to delay or deny the obvious?

I reached one clear conclusion: complexity. The things we tend to delay the longest are the things we believe to be too complicated. The earth is the most complicated system in our lives, so it makes sense that we pause when we think of something as overwhelming as climate change. It’s much easier to deny it’s happening and to delay doing anything about it.

I see this occurring in other areas of our life. Think of the last time you ordered furniture from Ikea. If you’re like me, you probably set that big cardboard box in a corner of the house for a couple of weeks, denying its very existence until you’re about to have guests. We all want the finished product but sometimes getting there just feels too complicated, so we deny and delay.

When I first wanted to get my finances in order, everything felt complicated. It seemed impossible to deal with all the issues involved. Just think of the questions we have to grapple with:

  • How do I budget?
  • What are my savings goals?
  • Do I have enough to buy a house?
  • Is my debt bad or good?
  • How long will it take to pay for my house?
  • How do I save for retirement?
  • Can I save for retirement?
  • What investment accounts do I need to open?
  • How do I pay my student loans?
  • Do I have the right insurance?

Once we have some experience with money, none of these questions seems overly complicated or hard to answer. But for anyone just starting out, each question feels like a mountain with a summit that can’t be seen from the ground.

Along with the steep climb, we have to master all these fancy financial terms like mortgage, amortization, HSA, 401(k), IRA, Roth, APY, APR, premiums, liability, fiduciary, credit, net worth and so on. This compounds the problem. Not only do I not know what to do, but also I can’t even have an intelligent conversation with someone who might help because I don’t understand the language. It all feels impossible.

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Result? I would just check out. I would tell myself, “I don’t have time to handle all these things, and it’s not that bad anyway. I’m young and I have plenty of time. Next weekend, for sure, I’ll work on my budget. I’ll finally set up that savings emergency thing.”

The thought of doing any of it was too overwhelming, so I denied there was an issue. That led me to never actually doing anything—until we had personal finance classes at church. We used Dave Ramsey’s Financial Peace University course. It provided a framework to process the various financial questions I had. It brought everything down to the basics. It removed the noise and allowed me to narrow my scope, focusing only on the most important things.

Morgan Housel, author of The Psychology of Money, explains why this approach works so well: “If you’re going to act on a problem that is monstrously complex and uncertain, the stripped-down, rules-of-thumb response is not only good enough. It can be superior to tripping over yourself in pursuit of something that appears marginally more accurate…. [S]imple ideas are not dumbed-down ideas. They are often complex solutions gift wrapped for you in a way that makes their application practical and sustainable.”

We gain confidence when we know exactly where to begin. It allows us to take control and make plans. That’s why something like HumbleDollar’s Two-Minute Checkup is such a great tool. It gives you confidence.

The next time you’re faced with a complex and uncertain decision, your best bet is not to run a bunch of Monte Carlo simulations. It’s probably better to use a simple rule of thumb and then take action.

And the next time you talk to folks who are just getting started, try to remove the complex words and tactics. Give them a simple rule of thumb that they can put into action immediately. I know that helped me a ton.

Kelechi Iwuaba is an engineer, a Nigerian-American and a self-taught finance nerd who lives in Atlanta. He loves talking about all things finance to anyone willing to listen. In his free time, Kelechi creates finance videos, records the “Rambling Mind” podcast and writes a blog. He loves volunteering at his local church and playing soccer at every opportunity. Follow him on Twitter @KelechIwuaba. Kelechi’s previous article was Once Upon a Dime.

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Nick Politakis
Nick Politakis
3 months ago

Excellent article

Neil Ridenour
Neil Ridenour
3 months ago

Thanks for a good article on “how to think.” We had a decent handle on our finances but took the Financial Peace course anyway and went on to become coordinators. The most important thing it did for us was give us a “why” for what we were doing to get us to make a decision. As I learned in my work life, when you have 60% to 80% of the information, you make the decision. You’ll almost never get perfect data. Decide and move forward, get on with life. Thanks for providing this.

Edmund Marsh
Edmund Marsh
3 months ago

Good article, Kelechi. I’m also a big believer in making a small start to begin moving in the right direction. I’ve found it works for me when the problem is initially too large to hold in my head all at once. When I outline a treatment plan for a rehab patient with a complex problem, I don’t initially cover every detail of the work that I think will be required, just enough information for the next week or so.

Andrew Forsythe
Andrew Forsythe
3 months ago

Thanks, Kelechi, for this. I’ll add my experience to what you and Rick have said. When I was practicing law I faced something similar when preparing for trial in a case. There was always so much to do, and it had to be done while at the same time attending to all the day-to-day work on my other cases.

What helped me was to vow to do something every single day on the trial preparation—even if on some busy days it was only something simple and only one thing. Adhering to that rule went a long way towards getting the preparation done.

Rick Connor
Rick Connor
3 months ago

Kelechi, thanks for the interesting article. As a fellow engineer I am very familiar with being overwhelmed with complexity. I was taught early in my career that when I get overwhelmed with a challenge, to break it down in to simple tasks and complete one. The act of completing something always made me feel better, and gave me momentum to finish the project.

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