Below is a good article from Carl Richards discussing the importance of consistently confronting the realities surrounding our financial life instead of ignoring them. When it comes to money, ignorance is not bliss.
C&J Wealth Advisors
Article credits: Behavior Gap Newsletter by Carl Richards | July 31, 2014
Do You Stick Your Head in the Sand?
Not all information is created equal. It’s particularly true when it comes to financial decisions. Information about how your neighbor invests, for instance, is of little use to you. While knowing how much debt you currently owe can matter a lot. But there’s a problem. We don’t always want to hear the information we need to know.
Information aversion, or the ostrich effect, can lead people to avoid learning certain information if they suspect it will be bad news. Economist Josh Tasoff and accounting professor Ananda Ganguly conducted a study that tried to assess how information aversion affects health care. If you’re the kind of person who avoids going to the doctor for as long as possible, you probably know what they discovered.
A number of study participants opted to avoid testing for a particular (non-lethal, but unpleasant) disease. When asked why, “the most common explanation was that they felt the results might cause them unnecessary stress or anxiety.”
Now, how many times have you avoided learning more about a particular area in your financial life because you felt the answers could be stressful?
I suspect all of us have done it at least once. From knowing our real debt number to figuring out how much we really need save for retirement, sometimes it’s just easier to stick our heads in the sand. Ignorance is bliss, or at least that’s what we tell ourselves to justify not knowing something that could help us.
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