Why Do We Procrastinate?
My wife and I bought a house a couple summers ago, and once we moved in, we were very excited for all the DIY (Do-It-Yourself) projects we decided to undertake. Soon our home became filled with Lowes shopping bags and half completed projects. We kept thinking to ourselves, “I’ll finish the painting/sanding/de-weeding tomorrow.” Instead of finishing the laborious tasks now and reaping the benefits later, we opted for walking our dog or trying yet another local ice cream shop.
“I have a great joke about procrastination...I'll tell you later.”
Even though we all know that saving for retirement is important, why does it become challenging for so many of us? An interesting study looked at how immediate gratification may play a role. To make their study relevant to us, let’s say we had a meeting scheduled for next week. And for this hypothetical meeting, Kris, our wonderful client services director, e-mailed you asking whether you prefer we bake fresh cookies, make homemade ice cream, or serve fresh fruit (all are in fact non-hypothetical options).
According to this study, 74% would request the healthier fresh fruit in advance. However, on the day of the meeting, many of the people who requested the fresh fruit would opt for the less-than-healthy cookies or ice cream. This concept is due to what some call the “present bias”, in that just like we know we should be eating fruit, we know we should be saving. But we think to ourselves, we will watch our diet and save more money next year, in the future.
This upcoming month, I welcome you to schedule a meeting with me so that we can continue to discuss how you (or most likely your children) can save for retirement now, not in the future. And just like choosing fruit over sweets and saving now rather than spending, sometimes calling and setting up a meeting with your financial advisor may fall on the future to-do list. I would encourage you to do so today, and when we do meet I hope you will check in with me on the progress of my home improvements!