What do Waiting Tables and Financial Planning have in Common?
March 1, 2017
Susan Friedland, Communications Manager, Shapiro Financial Security Group, Inc.
Do you ever have a song that just sticks in your mind after hearing a small portion of it? Or watched a television program that leaves you hanging as to how the plot will resolve? Does your mind keep going over your ‘to do’ list as you are trying to fall asleep?
If you are like most people, you will be singing that song over and over, tuning into that show each week to see what has happened, and losing sleep to worry. You may be experiencing the 'Zeigarnik effect', a phenomenon that describes the tendency to remember incomplete or interrupted tasks more easily and persistently than tasks that have been completed.[i]
What effect can this theory have on our financial lives?
The Zeigarnik Effect
To answer this question, we need to travel back to the cafes of Berlin in the 1920’s. It was there that a Russian psychologist, Bluma Zeigarnik, noticed that the waiters were able to remember and track complex orders that were not yet delivered to the patrons, but appeared to forget those that had been completed. She created a series of experiments to test her hypothesis that incomplete or interrupted tasks remain active in our memories while completed tasks are forgotten. She published her results in “On Finished and Unfinished Tasks” in 1927.[ii]
In the experiments, she asked each participant to complete a series of 20 tasks, both manual, such as constructing clay figurines, and mental, such as math puzzles. Half of the subjects were interrupted before completing the activities. The subjects were subsequently given a recall test and it was found that participants were able to remember the interrupted tasks at twice the rate of memory for the completed tasks. [iii] In another study, she found that participants were able to recall unfinished tasks 90 percent better than they did the finished activities.[iv]
She concluded that once a task is started it creates a need for completion and the person remains in a state of unresolved tension until it is finished or resolved.[v] Further studies have validated Zeigarnik’s outcomes, but one qualifier that has since been discovered is that the person must be motivated by the task and by the anticipated result for the effect to take place.[vi]
In a 2011 study testing the Zeigarnik theory, the authors found that “committing to a specific plan for a goal may therefore not only facilitate attainment of the goal but may also free cognitive resources for other pursuits.” It seems that once a plan is made, the person can let the worry go and return to follow up at a later specified time.[vii]
The Implications for our Financial Lives
Modern life brings a constant stream of activities, desires, issues and conflicts that we need to deal with on a daily basis. We are constantly multi-tasking and the ability to resolve all of our issues can become overwhelming. Incomplete tasks, especially those with potentially negative outcomes, can lead to stressful, intrusive thoughts that interfere with sleep, increase anxiety and lead to other harmful consequences.[viii]
The enormity of these tasks can cause us to procrastinate. When something is overwhelming or we do not know where to start, the tendency is to do nothing and worry. Dealing with money and finances can be perceived as big and scary, and for many, these worries are what keep us up at night. We may ask ourselves “Should I make a budget?” or “How am I going to save for college?” That is followed by “How am I going to do this?”
What Can I Do So I Can Sleep Peacefully at NIght?
It is the action of planning that is the catalyst toward change. The Zeigarnik effect suggests that taking any action is enough to start the process and to decrease the inherent tension of inaction or interruption.[ix] Even a small step, such a looking at SFSG’s website can be your first action towards completing a goal.
Taking any positive step towards a goal starts the process and basic human nature will push us towards completion. Just as we are compelled to see the next episode of that cliff-hanger, we are compelled to finish what we start as long as we are truly motivated to achieve the outcome. This appears to apply to long term goals such as financial planning as well as short term tasks like remembering a dinner order. We want to finish what we start - it relieves our tension and brings a sense of fulfillment
You do not need to have it all figured out or, indeed, to have any of it figured out and you do not have to do it alone. Many of our clients know that they need assistance, but do not know where to start or which questions to ask. It is our job to guide and assist you in making the decisions that are right for you. If you take the first step, we can help you reach your goals so you will be able to sleep peacefully at night knowing that the process for resolution has begun.
[vii] Journal of Personality and Social Psychology. 2011 Oct;101(4):667-83. doi: 10.1037/a0024192. Consider it done! Plan making can eliminate the cognitive effects of unfulfilled goals. Masicampo EJ1, Baumeister RF.