Smartphones and other gadgets allow us to read the news, watch a football game and even track our investments anytime, and nearly anywhere. We’re always multitasking, or moving from one bit of information to the next. With that in mind, Certified Financial Planner Paul Fain joins us now with a question: is technology making us stupid?
WE ARE A TECHNOLOGY-ADDICTED NATION!
According to data reported in a recent Wall Street Journal article, individuals check their mobile phones 47 times per day.
• First thing in the morning: 89%
• Within an hour of going to sleep: 81%
• While shopping: 92%
• While watching TV: 89%
The problem is, we rarely look at one piece of information long enough to fully digest it.
CAN THIS SHORTAGE OF ATTENTION LEAD US TO MAKE POOR FINANCIAL CHOICES?
Absolutely! We are drowning in data. When it comes to our money, effective decision-making typically requires:
You might use your mobile devices to review your 401(k) account, preview a tax return filing, review bank accounts or your budget, or to decide which employee benefits to enroll in.
WHAT ARE SOME WAYS THAT WE CAN COUNTERACT SHORT ATTENTION SPANS?
• Avoid multitasking: Trying to multitask makes us worse at most tasks. With smartphones and mobile, we are constantly distracted by incoming emails, texts, and alerts. If you have to make major financial decisions on a screen, you should at least do it in airplane mode or “don’t disturb” mode.
• Pick the right time of day: Investors need to become more aware of fluctuations in the amount of attention we have at different times of the day. Morning or afternoon? Find the calm lulls in your schedule.
• Focus on the most relevant information, not the most available: When we focus on the latest alert or the numbers on a single screen, we become subject to the “what you see is all there is” error. This often leads us to focus on short-term results. If we’re not retiring for several decades, there’s no reason to pay attention to the daily fluctuations of a stock or a mutual fund. Your biggest mistakes will come from overreacting to the latest stock swings.
• Force yourself to see the big picture: Some apps automatically monitor our overall finances, pay our bills, or set aside money into our saving accounts.
• Keep away from the phone: Recent research shows that just having your smartphone next to you—even if it isn’t turned on—can diminish your cognitive capacity. The mere proximity of a smartphone causes us to monitor it—we’re waiting for those alerts and interruptions—and that monitoring takes up attentional resources.
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