This post was written by Gian Gonzaga, Chief Data Officer for Earnest, as part of our new microsite “An Earnest Guide to Decision Making.”
“What will I eat for breakfast?” and “What will I do with my life?” seem like vastly different questions, but the ways in which we approach each decision have more in common than you think.
In the past 50 years, we’ve learned a lot about how the decision-making process works—from the information we consider and what we ignore to how we fill in the gaps. For a long time, scientists thought humans were completely rational when it came to our choices (a concept called homo economicus). However, we know now that the decision-making process is much more complex.
The field called behavioral economics, which melds psychology and economics, has revealed that most of our choices are not, in fact, made through careful deliberation. Instead, our decisions—both big and small—are often guided by our emotions, our surroundings, and a host of subconscious mental “shortcuts.”
While some call these behaviors “irrational,” many of the ways we process decisions make perfect sense. Consider one of the biggest choices you’ll make: a lifelong partner. Being in love motivates behavior that seems irrational at first—hyper-focus on one individual, more money and time spent—but it can lead to many long-term emotional benefits such as social support, shared labor, and perhaps most importantly, the possibility of having and raising children.
“The better we understand the emotions, motivations and subconscious behaviors behind these decisions, the better equipped we are to make the right ones.”
Why does knowledge about how we make choices matter? So much of our long-term success depends on the decisions we make (and how we make them) in our 20s and 30s. Should we put money away in our 401(k) or blow it on a weekend trip to Vegas? Do we buy that fixer-upper or continue to rent? Do we stay on our current career path or try our hand at graduate school? The better we understand the emotions, motivations and subconscious behaviors behind these decisions, the better equipped we are to make the right ones.
Welcome to Earnest’s Guide to Decision Making. Our team talked to experts, dug into the data, and heard from people in their 20s and 30s about how they make decisions, so you can use this knowledge to make smarter, better choices in life on your own terms.