Directions is pleased to welcome a guest blog post from one of our cofounders, Elizabeth Jetton, CFP® . For more about Elizabeth, click here.

I recently read a fascinating interview published online in Knowledge @ Wharton with author and researcher, Sheena Iyengar, a professor at Columbia Business School who wrote The Art of Choosing.

When I ask clients what is important to them about money, often both men and women will tell me, “It’s having choice: being able to do what I want. “ Simple. Choice equals freedom. Or does it?

The psychology of choice is fascinating. Studies indicate how fickle we can be about what we want, whether we are in the grocery store, choosing between jobs or selecting an entrée at a restaurant. We are impacted by what others want; by what our culture values and by competing internal pulls between what we truly value, what we think we ought to value, what our gut tells us and our rational mind is telling us.

There can be a cost to having too much choice. In one of her studies, Iyengar compared 401(k) participation rates for Fidelity funds, which manages billions of dollars in retirement funds. In 401(k) plans where the employees were offered 10 or fewer investment choices, participation in the plan was around 75%.

When the number of investment choices reached 50 or more (Fidelity offers 4500) participation in the plan dropped to 60%. In other words, too much choice can paralyze us. We may lack enough information or context for even beginning the process of choosing. We feel defeated and exhausted before we start. Not a good thing when it could mean the difference in whether or not we have enough money to spend when earning a living is no longer desirable or feasible.

Something else I’ve observed in myself regarding spending money will probably seem so obvious to you. If I don’t go in the store, I don’t have to make a choice of what to buy, so I don’t buy. Duh.

I love to knit. What I really love is yarn: the feel of different yarns, the colors, the vision I have of creating something beautiful, the image of myself relaxing in my favorite chair with a pile of yarn in my lap and the dog by my side. I do not seem to be able to enter a yarn shop without buying something, despite very strong intentions not to buy, because I do not need more yarn. I have accumulated what a saleswoman calls, “SABLE: stash accumulated beyond life expectancy”.

As soon as I enter the yarn store, the “now I must choose” part of my brain engages and I find myself scanning the aisles, not just looking for the pleasure of it, but weighing choices. That is, do I want a silk yarn or alpaca? Blues or reds? The choosing brain vs. the rational “just looking” brain usually conquers me. Maybe it’s the ancient female ancestor still alive in me, who goes “on the hunt”, who is a gatherer of berries, seeds and greens, searching the forest for the next meal, gathering, gathering, gathering. Shopping (for the things, like yarn, that call to me) feels like ancient ritual, feels good, feels like gathering.

I can gather a lot of yarn in a year if I allow myself. And sometimes that leads to the vicious cycle of guilt: guilt for unintended spending. Guilt makes me hungry. Great – now I can feel guilty for spending and for eating.

We’re laughing, right? But this behavior can cost a lot more than plowing through a yarn budget. We won’t make a choice where we need to make it (participating in a 401(k), hiring a financial advisor, etc.) but we will get trapped into choices we would be better off avoiding.

The pull is strong. The gratification of choosing whatever it is calling us- shoes, children’s toys, jewelry, home goods, books, yarn … you name it – can represent the opposite of freedom: addiction, a lack of ability to choose “no”.

Freedom is the ability to choose not only “yes”, but to choose “no”. To feel the empowerment of serving a grander goal, like money for your future, or money for a long desired trip or building reserves so you can have true freedom even if times get a little rough. You can achieve these goals because you exercised your choice to say “no” to the pull of “more” and exercised your choice to say “yes” to not spending. Additionally, you have the choice to say yes to , but to saving, to calling an advisor, to raising the question with your friends or an advisor about money, to appreciating all that “yarn” (insert your own passion) you’ve already acquired.

The choice to love what you have, just like your mother told you, is perhaps the greater freedom. The power of choosing “none”, a statement of personal independence. I’m still a work in progress, because I’m human. It helps to talk about it!