I have a friend who readily admits she over-analyzes everything.
I have another friend who lives in his own world, blissfully ignoring almost everything that goes on.
Both of them seem to manage their lives, although somehow I think they would cope better if they followed more of a middle path.
And the same applies to managing your finances.
"Two common mistakes people make are overanalyzing and refusing to make changes," said Pat McKeough, financial advisor and publisher of The Successful Investor newsletter.
Do you grab on to every economic prediction? Perhaps it's time to let go.
McKeough cited Peter Lynch, one of history's all-time top mutual-fund managers, who said, "If you spend 12 minutes a year worrying about economics, you've wasted 10 minutes."
Commenting on economic predictions, McKeough said: "Nobody guesses right every time, and even the best economists can be right on in one year and dead wrong the next."
On the other hand, do you take a laissez-faire approach: "It will all work out somehow"?
Let's say you are cast adrift in a lifeboat.
Would you make your best effort to find land or a shipping lane to increase your chances of survival or just drift and hope for the best?
Even though you can't predict the future, you can manage your spending, borrowing and investing to maximize your chances of surviving and even profiting - observing what's going on, listening to the experts' different opinions and then taking from all this information what makes the most sense to you in your situation.
McKeough cites a third common mistake people make: taking on heavy risk to try to make up for their investment losses - like desperate gamblers who bet their last few dollars on lottery tickets or a long shot at the casino or track.
Don't be tempted by this or any other "get rich quick" approach.
Instead, stick to the basic approaches like paying off non-deductible debt, looking for under-valued but sound investment opportunities and arranging your finances to save the most income tax.
Mike Grenby is a columnist and independent personal financial advisor; he'll answer questions in this column as space allows but cannot reply personally
