This is a story about an unexpected financial event. It all starts with my good dog, Ernie, a soft-coated wheaten terrier. For years, Ernie lived up to his breed’s reputation as a fierce chaser of vermin, keeping my pride-and-joy garden safe from marauding bands of rabbits.
With my pacifist dog looking on, the blasted rabbits made a banquet of the shrubs and rose bushes and mature cedar trees. By the time spring came, the net effect was a garden that looked a lot less like Sissinghurst and more like something designed by Dr. Seuss. (Truffula trees, anyone?)
Then came the sticker shock and the neuroeconomics lesson that is the point of this article.
The replacement cost of those mature trees and shrubs was several thousand dollars – which was precisely several thousand dollars more than I had planned on spending on replacement trees. And in my upset over the horticultural ruin, I got caught up in a kind of thinking characterized by Narrow Focus: namely, focusing exclusively on just one choice while being blind to all others.
Fortunately, I caught myself. The tipoff for me came when I heard myself tell a friend I was stewing over “whether or not to replace the trees”. According to authors Chip and Dan Heath in their book, Decisive, that phrase — “whether or not” — is a surefire indicator that a person has entered Narrow Focus. And that frequently leads to regrettable decisions, particularly in the world of finances.
The way out of Narrow Focus is simply to go through a forced exercise of deliberately considering other options. What other choices exist in this situation? And what is the Opportunity Cost of sticking to the first option – i.e. what would I have to give up?
And so I forced myself to list alternatives:
- I could put in plants that rabbits tend to leave alone;
- I could take up sculpture gardening;
- I could hire Elmer Fudd;
- I could pay more thoughtful attention to my husband’s yearning for a boat.
And sometime during that process of deliberately listing other options, I came to the realization that replacing the trees was just plain DUMB. Unless I was also planning on replacing Ernie, buying more trees was equivalent to buying more rabbit food. Now THAT was something I hadn’t even considered while I was stuck in Narrow Focus.
So the next time you’re facing one of those financial decisions that involve a heightened level of emotions, remember that you, too, are at risk of being in Narrow Focus. Listen for “whether or not” statements in your deliberations. Consider the Opportunity Cost. If you’re stuck, ask your friends and family to help you see other options. Chances are you’ll make a much better decision.
And you might even come to appreciate Truffula trees. Or boats. (But not rabbits. That would be going too far.)