Since knowledge is power, you may think it’s important to consume as much financial news and educational content as possible. However, taking in too much information about money can make it harder to make good financial decisions. For example, investors who listen to lots of negative stock market news during recessions may be tempted to sell off their investments in an attempt to limit their losses.
When you engage with too much financial media, you can experience information overload. Here’s why consuming lots of financial content can be overwhelming for the average investor.
Everyone Has Different Money Opinions
One of the reasons why it’s so overwhelming to read lots of financial news is that everyone has different opinions about money. Today, I was tinkering around with my retirement projections and used a couple of different calculators to see how big of a nest egg I’ll need. I tried to enter the same set of inputs into each calculator but got wildly inconsistent results.
Some calculators suggested I only need around $2 million to retire comfortably, while others stated I need upwards of $4 million. If you ask Google how much money it takes to retire, you’ll get the same kind of conflicting results. While finance bloggers like Mr. Money Mustache have claimed you only need $625,000 for retirement, Suze Orman recently suggested that retirees need to sock $20 million away for catastrophic scenarios.
These differences of opinion in the finance space can make your head spin! Trying to keep up with current recommendations and figure out which advice to follow can lead to overwhelm. That’s why it’s often better to filter the financial news you consume. The internet is full of financial news sites that use shocking or negative headlines to get you to click. Consuming too much of this fear-based media can cause you to make poor investment decisions and stress you out unnecessarily.
I’ve been through this cycle of information overloads myself and have a few suggestions to help you avoid it, which are outlined below.
3 Ways to Avoid Financial Information Overload
Don’t Consume Financial Content When You’re Feeling Emotional
In my experience, the worst time to consume financial content is when you’re feeling a negative emotion like sadness, boredom, anger, or worry. When I’m upset, I seem to click on the negative articles instead of more positive ones that help me feel in control of my finances.
Bad financial news also stresses me out more when I’m already feeling blue and can send me into a worry spiral. Once I’m in that state of mind, I may make poor money decisions as a result.
So as a general rule, I try not to consume financial content as a form of entertainment or distraction when I’m feeling low. I focus on practicing self-care and leave money concerns for another day. In my experience, it’s best to engage with personal finance content and make money-related decisions when you’re feeling clear-headed.
Set Limits on Media Consumption
I also try to set limits on media consumption so I don’t get overloaded by financial info. Our constant 24-hour news cycle creates a huge amount of money-related content. The average investor simply doesn’t need hourly updates on the stock market’s performance.
The stock market can be pretty volatile sometimes. Tracking its movements too closely can stress you out and cause you to make poor emotion-based investing decisions, such as selling off your assets during a bear market. You may also feel tempted to try and time the market, which rarely works. Most self-made millionaires say that consistent, regular investing over several decades is the key to financial success, not active trading.
That’s why I set hard time limits on my media consumption. It’s easy to get sucked into stock market news and start basing your investment decisions on it. To ensure I don’t go down that rabbit hole and stick to my pre-determined investing plans, I only consume financial content for about 30 minutes per day.
I also try to stick to trusted sources. The internet is full of misinformation, so you have to be careful about where you get your financial advice and news from. Curating my newsfeed has helped me avoid feeling overwhelmed by conflicting money opinions too. Now I choose to read publications and blogs that mesh well with my financial goals and money philosophy.
Although I don’t want to create an echo chamber for myself, reading content that isn’t directed toward me (such as Suze Orman’s retirement opinions) can make me anxious. There’s simply no way I can save up $20 million in my lifetime. So instead of reading content that makes me insecure that I’m not rich, I stick with articles that are geared toward middle-class Americans.
Increase Your Financial Knowledge Slowly
Consuming too much money-related content isn’t good for your mental or financial health. However, being undereducated on money matters can be just as detrimental.
A study in the Journal of Behavioral Finance showed that people with low financial literacy are more prone to information overload when it comes to money matters. They also feel overwhelmed when trying to make financial decisions like choosing investment vehicles, especially if there are lots of different options. This can cause them to make poor money moves.
So it’s important to strike a balance between gaining financial literacy and avoiding media-induced information overload. You don’t want to avoid money-related content and stick your head in the sand when it comes to your finances. But you don’t want to hyperfocus on money either. Constantly checking your accounts and scrolling through CNBC Money isn’t helpful or healthy.
However, forming a good relationship with money and media is easier said than done! Since I’m a personal finance writer, it can sometimes feel like money is constantly on my mind. But setting a time limit on money-related media consumption and avoiding financial news when I’m upset has helped me strike a better balance.
How do you avoid financial overwhelm and information overload? Share your thoughts in the comments!
Vicky Monroe is a freelance personal finance and lifestyle writer. When she’s not busy writing about her favorite money saving hacks or tinkering with her budget spreadsheets, she likes to travel, garden, and cook healthy vegetarian meals.