Financial Blind Spots Can Come Back to Haunt You
November 26, 2010Spoiler Alert: Watch this video before reading this blog:
[YouTube video: Selective Attention Test]
There are a few reasons that I found this video particularly interesting (which means I’ll probably talk about it in a few blogs). The first thing that struck me was the concepts of “blind spots.” When I watched the video for the first time I didn’t see the gorilla. How in the world can a gorilla walk across the screen, do a little dance, and go unnoticed? I was so focused on the task at hand (counting the passes by the white shirted players – and I was able to correctly count the number of passes), that I missed something as blatantly obvious as a gorilla on the screen.
I have some “gorillas” in my personal budget and they recently walked across the screen for me. Confession: I eat far too many meals in restaurants and far too few at home! Just like getting caught up in counting the number of passes in the video, I got caught up in my day to day life and failed to spot an obvious budgeting gorilla. Between work, travel, chasing/chauffeuring 3 kids all over town, and making time for my personal life, I don’t always spend time tracking my expenses. (Yes, a financial planner who doesn’t pay enough attention to his own situation.) That’s why for me, an online tracking tool (I use Mint.com) works.
The last time I logged on and looked at my spending patterns and tracked my expenses, I realized just how much I had spent on food over the last few months. I had developed a pattern and it was not a budget-friendly pattern. I hadn’t even realized it; I had a blind spot. So, I have decided to cut my budget for eating out by half, and for the next 2-3 months this goal will be my priority.
Only when paying attention and tracking was I able to spot the gorilla in my budget. How do you spot yours?
Resources: Expense Tracker, Easy Spending Plan, How do I create a budget