Capital Advisory Group February 2019


119 Old State Rd., Ellisville, MO 63021

FEB 2019

Have you ever had the eerie sensation that you’ve been in the same situation before? Call it deja vu — or like Bill Murray stuck in “Groundhog Day,” the world around you is stuck on repeat and all you want to do is wake up. When it comes to your finances, this sensation might be especially familiar. How many times have you used your credit card when you hadn’t planned to or paid a bill late, promising yourself this would be the last time? The psychology behind financial decision-making is pretty fascinating. An MIT professor conducted a recent study that explores consumer behavior. In the study, participants were given the opportunity to bid on a sold-out basketball game. Half of them were told they could only pay with cash, and the other half were told they could only pay with a credit card. Even the marketing professors were amazed by the results:The students who used credit cards outbid the cash bidders by twice as much. People are willing to spend more if it means they get to delay paying for that expense. When it comes to your taxes, delaying payment doesn’t work.The IRS reported Look at Your Habits to Avoid Getting Stuck on Repeat FEELS LIKE DEJA VU

that over 12 million people filed for an extension on their taxes in 2016. More than 14 million filed for them in 2018. Folks do this every year, wondering why they feel stressed each spring. What are they missing? The negative habits they’ve cultivated with regard to their taxes take time to undo, but if you don’t want your financial life to be like it was last year, you have to think about what you can do differently to see a change. It starts with identifying the habits that keep you stuck on repeat. Consider how emotions might be influencing these behaviors. Like Phil Connors, do you need to shift your perspective? Are you the type of person who puts something off and then feels guilty, causing stress that leads you to a standstill? Once you’re aware of cycles like these, you can begin to change your approach.The satisfaction of completing something early will be its own reward and encourage you to keep taking those positive steps.

Put strategies in place to make it easier for yourself to keep the good habits. It starts with the planning you do now to prepare yourself for a great spring. Avoid the Groundhog Day scenario of getting to April and feeling as stressed out as you did last year by implementing a tax strategy now. For example, figure out where you’ll make charitable contributions, if you want to contribute to a 529 plan, and how you’ll add to your retirement funds. At the end of “Groundhog Day,” Bill Murray’s character realizes what’s important in his life. His change of heart (spoiler alert) finally propels him out of the day he’s reliving, and as they say, he lives happily ever after. May you find your own epiphany this month.

-Jeff and John Zufall

(636) 394-5524 1

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