Last minute returns
We are all procrastinators, our tax returns prove it. Five Thirty Eight writer Ben Casselman says that one in seven people in the US wait until the last possible week to submit their tax returns. The smart move is to file your returns as soon as possible, so if you’re due any money, you get it back fast.
Retirement savings could be at least 12% and possibly 70% higher if people did not suffer from present bias – the tendency to put off making decisions that could benefit us in the long term. We also fail to recognise the power of compounding, according to US research. The effects are independent and underline the need for financial education.
Curse of knowledge
Incorrect decisions can be made even by people who have more information than others, according to this blog. Once you know about something, it is impossible to un-know information and this 1989 paper calls it the curse of knowledge. The solution is to try and think like an outsider and stay rational, numbers will prove you right.