Navigating the Mere Urgency Effect: Balancing Urgency and Importance

Understanding the Mere Urgency Effect in Behavioral Finance

In this episode of the Bryan Foltice Behavioral Finance Podcast, Dr. Bryan Foltice explores the Mere Urgency Effect, a psychological phenomenon where people prioritize urgent tasks over important ones, even if the latter offers greater rewards. He delves into recent studies from the Journal of Consumer Research by professors from Carnegie Mellon, Florida, and Chicago. Bryan explains the practical implications of this effect on productivity and financial planning, offering actionable advice on how to better categorize and prioritize tasks to achieve financial and personal goals. He also provides resources for further learning and tools for effective financial planning available on his website and Udemy. Listeners are encouraged to subscribe and engage with the podcast for more insights into behavioral finance.

00:00 Introduction and Podcast Overview
00:23 Promotional Announcements and Resources
01:27 Understanding the Mere Urgency Effect
02:14 Real-Life Examples of Urgency vs. Importance
07:12 Implications for Productivity and Finance
11:08 Strategies to Outsmart the Urgency Effect
16:19 Conclusion and Final Thoughts

Transcript

0:04

Welcome to the Brian Foltis Behavioral Finance Podcast, where we unravel the mysteries of behavioral finance and unlock the secrets to making smarter, more informed decisions with your money. Now, here's your host, Dr. Brian Foltis. Welcome everybody to the Brian Foltis Behavioral Finance Podcast. If you haven't done so already, please make sure you subscribe and so you never miss a future episode of this podcast. Also, please make sure you check out. udemy. com or brianpultis. com for the mini courses on behavioral finance. I currently have the advanced introduction to behavioral finance and introduction to efficient markets posted there with over three hours of content videos. notes and exercises for each of those mini courses. Feel free to check out both and choose the one that has the lowest price. I don't know which one that is, but both of them are pretty low barriers to enter into. So please make sure you check that out. Also make sure you go to Brian Foltis. com slash money strong for all the free resources and find the lifetime savings program Excel sheet to start your first. financial plan or continue on your financial plan into the new year. Today we are going to continue our theme and topic around time management and planning and we're going to delve into the mere urgency effect. The mere urgency effect. Now this is a new psychological study that came out fairly recently. So the first study that identified this principle was in 2018. And the mere urgency effect is people Prioritizing urgent tasks over important tasks, even when the less urgent tasks offer a greater reward. Us taking urgent tasks over important tasks. When I think about that, I immediately Go to email where you have the urgent email that comes out and it's flashing. Must help please respond action needed right away. And you're sitting in a meeting or you are maybe doing something productive in my world, working on research or working on content of some sort, creating new ideas. And suddenly this urgent task pops up. And what's your response? If it's like me, I go, Oh shit. And all of a sudden I go, Oh, this is really urgent. I must deal with it. And I deal with it. And then I realized, okay, what? What was I doing in the first place? And I'm all confused. And so I see this play out quite a bit in my life when I see students and they need something urgent and it becomes this big task and cleaning out my email is this big priority, sitting in meetings. And that's just my world of job and work, not to mention kids when they have all of their different sports and their school. And when you have this, what I never understood was the amount of information that comes in now. And the different apps that you have to download to get that information. And then some of them send announcement only to the app. Some of them send it to your email and then your text and then the app. And you are just getting Just a shit ton of information all so urgent at the same moment that how can you ever get anything important done? So anyway, if you are feeling like this is you that you prioritize some of these urgent tasks, you are not alone. And But now we know this is called the Mere Urgency Effect. Now when we dig into this study, which I found really interesting, this has what was this coming from? It's called the Mere Urgency Effect. This was in the Journal of Consumer Research, which is according to my understanding, a really a top academic journal in the world of marketing and. Three professors from Carnegie Mellon, Florida, and where's that third professor? Carnegie Mellon, Chicago, University of Chicago. So it looks like we have marketing, assistant marketing professor, associate professor of marketing, and a full professor of marketing. Running the whole gamut of the tenured track position. Where you have These categorizations of these tasks that we build into this quadrant. So important tasks that are urgent. We have unimportant tasks that are urgent, important tasks that are non urgent, and unimportant tasks that are non urgent. That means if you need to get a cancer screening, if you have a suspicious looking mole this is an important task that is considered urgent. If you have a coupon that needs to expire, That it's expiring and you drop everything, take that coupon and get chocolate or ice cream or whatever with that coupon that expires in that day. We'd consider that an unimportant task that are urgent. If you have. A routine medical checkup for your doctor's office or financial planning. These are important tasks that are non urgent. They don't have an actual expiration date or a timetable on these. Nevertheless, they're still very important. And then we have the unimportant tasks that are non urgent. And this is trying to find a tool bought several years ago and currently stored somewhere in the basement when no one engages in any at home activities. Or tool activities. Okay. That one doesn't really pertain to me and my world, but I can easily think about wasting time on my phone or doing something that is non urgent and not important but is still sucking away a lot of my life. Alright, so you might be wondering here, where are you going with this, Foltest? This is a behavioral finance podcast. A couple things to consider here, why this is such a big deal. First in general, if we focus on what's urgent and not important, this is going to lead us to less productivity, this false sense of feeling like we've completed something, even though our overall productivity and impact on what we're truly passionate about, or truly what we're trying to accomplish in our job is. Is going to get measured upon. This is where it can really adversely affect us. If you are a salesperson. and you are constantly cleaning out your email, you are not going to get your end of the year bonus based off of how well you clean out your email. And in my world, this is also something really important to consider and to think about how it if my job, if I'm going to be assessed on My research, how much I'm getting done, how much I'm getting published. This is something that is important, but either could be considered urgent or non-urgent. Depending on whether or not you set a deadline on it, you're gonna get assessed by that. My end of the year review does not care. How often I am responding to my students requests or needs, or their, whatever they have popping up in a efficient way. And so I can think about how to reprioritize some of these things, knowing what am I here to do, or what am I going to get assessed on and recalibrate. So that's why it's such a big deal. Not only will you, and then you're also thinking about some unnecessary stress, unnecessary burden where you're making something real stressful and urgent that isn't always the case or always needed. Into the world of finances though, this is where we go, all right, how are you going to, how are you going to tie this into finances? When I think about people with all of these urgent needs, people who are struggling Their finances who are reluctant to set aside a certain amount of time or spend 15 minutes writing out their first financial plan. They go, Oh, that's what a waste of time. And you look at what, how much time they're actually spending on finances. And you realize people who are struggling with their finances are spending hours each week at their job worrying about their finances, or they are trying to work on their late payments or their credit card late payments. And so there's this. They're constantly stressed out about making payments or trying to hit deadlines with their accounts and there's no money left over and now you have overdraft fees. All this stress and all this urgency is coming into effect where I think there's people who are spending between, I want to say around three to five hours a week on their finance at their job. And so this is now a whole productivity thing to try to help people with their finances. Because for me I track my stuff very Carefully and I like it, but man, I'm not spending more than handful of minutes per week looking at this stuff and so once again this importance versus urgency effect shows itself here Especially with people who are struggling with their money. And so what do we do here to outsmart this? urgency effect First of all, learning about this, we have to distinguish, is this urgent or important? And so we can prioritize urgency and importance by saying, Categorizing this into the four categories. So if it's urgent and important, this should become a priority. We should do this. I think I've previously mentioned the health screening. If you have a mole, get on the phone and don't delay and take care of that appointment, getting into a dermatologist. If it's important, but not urgent. This is the one that often gets overlooked and not as heavily prioritized. This is the one you have to build into your schedule. So try to set up a schedule to, to realize this is important. This is my research. This is where I say, look, I got no email. I'm going to turn off my email. And today I am working on this paper. In fact, I've got that up on my whiteboard. Friday. I am going to finalize my inflation paper and submit it and then organize my 4 percent rule outline paper. I'm going to put it on my schedule so it doesn't fall through the cracks because it's important. Although if, and if I don't put a timetable on it or I don't say I'm going to fucking do this on Friday, then I'm never going to do it. I've got it up on my whiteboard and please note that this podcast is not a part of my job at Butler and the things I say or the swear words I say are not related to that. Next we have urgent tasks that are not important. And that says, Delegate those tasks. Delegate the tasks that are urgent or non important. And this is where I struggle. Because sometimes I go, How am I going to delegate that? In my world, it's students wanting to set up meetings, and what I do to circumvent that delegation process and still be available to them. So I'm not deleting it. I still have to be available to students and people who are needing it. It's to create a scheduling system of clicking here and here's my availability, sign up, tell me what you want, and we're going to set up these important tasks when it makes sense for me. And I'm not rushing to reallocate my whole calendar or taking time to respond to that. We're just circumventing that process for tasks that are not urgent and not important. We either ignore. these tasks, which is sometimes easier said than done. I've, I know that the decision making process, if it's not a hell yes, it should be a no, but sometimes you just say, I'm just going to deal with this and not ignore it. But the longer I do this and the more times, the more repetitions I have of simply ignoring it. Okay. The more shit goes away and they'll figure out a different place to go. Sometimes it's a little humbling because you realize that you're not that important. You're not the go to person. But then you also realize that there are alternatives out there for people to figure out the answer to their questions without you having to be that resource. Now that's the non urgent, not important, that can be ignored. With your money, we talked about let's not make these late bills a late thing. If we can plan, suddenly these become non urgent items, paying your mortgage, because now you know you have the money. You're going to pay that money off. If you're struggling with that, let's talk, let's build a plan so we can alleviate that urgency. At the same time, we've been talking about our savings goals and what we're supposed to do with our plan. One of the things that I need to look at as well is reviewing at the end of every year, I've done all the right things, right? Like here I am. Doing all these great things, but reviewing living will estate planning, some of these things that often get overlooked, even I can continue to improve that. I still need to tackle these very important tasks that are, there's not a due date on it. I don't have to do a tax date in the United States is April 15. The set yourself up to have a living will and an estate planning. with your accountant, there's no deadline on it. So you have to put that into the diary or scheduling category to get that on the books, to take care of it and get these important things that are non urgent completed. Anyway, hope this helps you. If you have any questions, if you need anything please find me at brianfoltis. com. You can see me on Instagram, on Facebook. I'll post occasionally on Tik TOK. Okay. And on YouTube as well. So if you want some free content on behavioral finance and don't want to pay for those mini courses you can go to my. YouTube channel and check out the free content as I'll roll out one of those videos each week from those mini courses. If you're ready for the mini course, brianfoltis. com or udemy. com. And if you're ready for the budgeting software, get your hands on that for free. Brian Foltis dot com slash money strong. Anyway, I'll leave you with that. And if you've made it this far as well, please subscribe, make a nice comment. If you have it in your heart to do so that increases our scalability. And gets this interesting topic of behavioral finance into the ears of more people. So thanks again, have a wonderful day and we'll see you on the next episode. Thank you for tuning in to another episode of the Brian Foltis Behavioral Finance Podcast. We hope you found our exploration into the fascinating world of human behavior and finance, both enlightening and thought provoking. Be sure to subscribe for future episodes. And until next time, stay curious and financially savvy.