We all know that saving money is a good idea, but it can be hard to put aside cash when you’re tempted to go out for drinks with friends or get a new car. Short-term pleasures often overrule long-term rewards, even if they’re better—a phenomenon that’s called “temporal discounting.” It can be hard to overcome this way of thinking, but researchers have found a trick to help you do it.
What matters when it comes to making good choices for the future is changing how your options are framed. According to research recently published in the journal Psychological Science, options with long-term benefits are more enticing when they’re part of a large sequence of events.
In the study, participants were given series of binary choices, such as receiving $15 now or $20 later. When these options were presented in an independent, straightforward way (“Would you rather have $15 now or $20 later?”), participants were more likely to choose the immediate payout than if the options were presented as part of a large sequence of events—”Would you rather receive $15 tomorrow and then nothing in 30 days, or nothing tomorrow, but $20 in 30 days?”
When the question is posed this way, people were better able to see the consequences of their choices, because they were thinking about their situation in more detail. In fact, researchers even found that when thinking of decisions in this way, there was increased activity in brain regions associated with imagination.
So how can you apply this to real life? Next time you’re considering buying that expensive dinner, think about whether you would rather have that steak right now and nothing later, or nothing now and more money in your bank account in six months. Using this logic day-to-day can help encourage you to save and make wiser financial decisions.