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Why Close Is Often Good Enough When Managing Your Money

retirement_2I’m not a big football fan. Oh sure, I occasionally enjoy watching football on television. But,unlike hockey and baseball, I rarely bother buying tickets to attend football games in person.

That being said, this past weekend my buddy had an extra ticket to a college football game, so I eagerly tagged along.

Anyway, as I was sitting in the stadium blissfully watching the game, I started taking an interest in the chain crew along the sidelines.

For those of you who aren’t familiar with American football, the chain crew is comprised of three men who are responsible for measuring the yardage the offensive team gains in their quest to get a first down. It’s an extremely important job too, because, as any gridiron aficionado will tell you, football is a game of inches.

Most of the time, the chain crew stays ensconced on the sidelines because the officials on the field are able to easily determine whenever a team has gained the ten yards required to earn a first down.

Sometimes, however, the officials on the field are unable to make a first-down call via the naked eye.

That’s when the chain crew goes into action. Two so-called “rod men” carry a 10-yard chain onto the field that is attached to poles at each end. One pole is planted into the turf at the original line of scrimmage, and then the chain is pulled taut. If the nose of the ball exceeds the reach of the chain, the offense has earned its first down.

To ensure the sanctity of any measurement, a third official is responsible for marking the chain at the closest 5-yard mark on the field and escorting the chain crew onto the field, being careful to never let go of the marked link on the chain. Doing so ensures the chain’s position is not inadvertently corrupted when it is transferred from the sideline to the field.

It’s all very impressive to the casual observer — which is why I used to think that “The Dance of the Chain Crew” was a carefully choreographed ballet of scientific precision.

However, now I know better.

Believe it or not, every time the offense got a first down, the chain crew on the sideline always established the new first-down spot by making a quick visual observation of the ball’s position on the field — even though most of the time they were at least 80 feet away.

In other words, the chain crew was merely “eyeballing” it. Yep. The entire process is completely arbitrary, which makes the usual pomp and circumstance that accompanies critical third- and fourth-down measurements in American football pure overkill, if not an outright sham. I know.

And you thought “close enough” only applied to horseshoes and hand grenades.

That being said, the chain crew is still important because it provides field officials with the means to make decisions — even though the info they provide isn’t 100% accurate.

I know what you’re thinking: So what’s this have to do with personal finance?Plenty.

Unfortunately, a lot of folks who recognize the importance of managing their personal finances often refuse to make critical financial decisions or implement good personal finance practices because they’re perfectionists.

For instance, I know plenty of folks who never got around to implementing a budget because they had no idea how much money they should allocate to their individual discretionary and non-discretionary expenses. I’ve also spoken with people who delayed making contributions to their 401(k) plans because they couldn’t decide what percentage of their income to commit for retirement, or feared they were going to “incorrectly” allocate their fund mix between stocks and bonds.

Armchair psychologists call that “paralysis by analysis” — and it can be costly. For example, failing to contribute $3600 into a 401(k) for just a single year leaves $10,605 of pretax earnings on the table, assuming a constant 4% return over 35 years.

When it comes to managing our money, perfection is usually the enemy of good enough — and often counterproductive too.

So the next time you find yourself dithering over a particular financial decision, make sure you’re not over-analyzing things; it could be costing you more than you think.

After all, there are times when close is good enough. Just ask any football chain crew.

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