"We forget all too soon the things we thought we could never forget." Joan Didion

Today I was prepping for my Money Matters segment on Alabama's 13, and I come across a survey conducted by the insurer Allianz regarding financial resolutions.  The press release stated that Americans were entering 2014 with a false sense of financial security.  

The new release was titled, Resolution Survey reveals collective amnesia about the effects of 2008-2009 Financial Crisis. That is a shocking headline considering we are only a few years removed for an economic crisis, the like we have not seen in generations.  Included in the findings:

• Only 14% of American's have financial planning as a resolution for 2014
• Almost  half of respondents say they are unsure about seeking financial advice this year

Why?  Well according the survey, nearly 1/3 felt they didn't make enough money to worry about it. And while I don't dispute those findings, I suspect there are plenty of other reasons that simply weren't asked about.  

One of those reasons is what behavioral economists like to call recency bias.  Simply put, we often derive our perspective on finance, and anything else for that matter, based on our recent experience. In this instance recent would be defined as the last 12 or so months.  

Planner and sketch artist Carl Richards explains it nicely in this New York Times piece.  Recency bias can causes ALOT of problems when it comes to the management of your finances.

• You buy investments at the wrong time
• You sell investments at the wrong time
• You take on more debt at the wrong time
• You buy a vacation home at the wrong time 
• You trade your car for a new one along with a new loan at the wrong time

You get the picture.  I am thrilled the economy has recovered from the precipice as quickly as it seems to have, but we should not forget the lessons that crisis taught us or the damage it inflicted.  Investing is for the long term, consumer debt is bad debt, adequate cash reserves should not be negotiable.  It is too soon, to put the financial mayhem of 2008-2009 behind us. 

Confidence is a good thing, over confidence however, not so much.  I am all for resolutions. Goals are kinda of my thing, but beware of judging this coming year's market or economy based on what has just happened.  It may be trite, but the past, regardless of have recent it may be, does not predict the future.

Press on my dear friends, but don't abandon planning.  Planning matters even when, and especially when things turn out different than expected.