For Fast Company, Becky Kane explains that people have such a hard time reaching their long-term financial goals, like saving for retirement, because our brains aren’t hardwired to do so. She writes:
Put in practical terms, when thinking of yourself in a month or a year or a decade, your brain registers that person in ways similar to how it would register Taylor Swift or the mailman or the lady driving the car in the next lane over. Understood in that way, saving for retirement is the neurological equivalent of giving money away to someone else entirely.
That’s not exactly news, though what is crucial here is that this means that some of the steps behavioural economists have taken to encourage people to save, like showing them age progression photos of themselves, aren’t likely to be effective if you still don’t think of that person as you.
So, if our brains are more or less hardwired against our best long-term interests, what can we do to circumvent that? We crave the instant gratification of accomplishing something in days or a week, rather than a year. One actionable step, then, is to focus on making short-term goals easy stepping stones to accomplishing long-term goals. “Whatever your long-term goals may be – getting in better shape, launching your own business, writing a book – thinking about your deadline in terms of days rather than months or years can help you wrap your mind around how close the future really is,” writes Kane.
If your long-term goal is to save more, for example, then making a weekly or monthly savings goal that you know you can cross off will help you get there, and make you feel happier and more accomplished in the meantime.
Taking it one step further, you can reframe what you’re doing in terms of its immediate rewards. Kane uses writing her article as an example of how this could work:
I’m going to focus on the sense of accomplishment I’ll feel in just four hours time when I will no longer have to feel guilty about not finishing this thing I’ve put off for so long that it’s started to feel like a squirmy eel in the pit of my stomach every time I think about it.
In the ideal financial world, we’d all have fluffy bank account balances, solid investment portfolios, houses that are paid off and no debt. In reality, it’s difficult to see even one of those goals come to fruition, let alone all of them at once.
This is important because the process of accomplishing goals is just as, if not more, important than checking the goal off your to-do list. Take this example (which Kane notes) from Kaitlin Woolley of Cornell University and Ayelet Fishbach of the University of Chicago, who study goals and people who accomplish them:
In one study, we asked people online about the goals they set at the beginning of the year. Most people set goals to achieve delayed, long-term benefits, such as career advancement, debt repayment, or improved health. We asked these individuals how enjoyable it was to pursue their goal, as well as how important their goal was. We also asked whether they were still working on their goals two months after setting them. We found that enjoyment predicted people’s goal persistence two months after setting the goal far more than how important they rated their goal to be.
The researchers observed these results across a variety of goals, including fitness, eating healthily and education.
Woolley and Fishbach recommend that people factor pleasure into which activities they choose to accomplish their goals. That might seem obvious, but the immediate gratification is what will keep you going. So find a workout class you actually like, or a way to save that feels fun for you.
Then try mixing in more immediate benefits, the researchers suggest. “We found that high school students worked longer on a maths assignment when they listened to music, ate snacks, and used coloured pens while working,” they write. “Making activities more enjoyable, by listening to music while exercising or working in your favourite coffee shop, may help you persist in your goals.” Just because you’re working toward something doesn’t mean it needs to feel like work all of the time.
And finally, reflect on the benefits of immediate gratification as you work toward your goal. If you’re saving, check in on your account balance and revel in your progress. If you’re trying to get in shape, take time to notice when the five-pound weights no longer feel as difficult to lift.
“We found that people ate almost 50 per cent more of a healthy food when they focused on the positive taste, compared with another group that focused on the health benefits,” they write. “When you are pursuing a goal, seeking out the positive experience — to the extent that it offers one — may aid your persistence.”
We’ve long written about the necessity of taking small, consistent steps to reach certain goals. It applies to exercising, writing, playing the piano, etc., as much as it applies to money. As you look ahead to 2019, think of the small steps you can take now that will bring you the most satisfaction.