Stories | June 22, 2016

How to double down on boring money tasks

Managing money can be a workout for the brain as well as the wallet – here’s a way to combine the pain with pleasure.

“I’ll do it – when I get around to it.” Most of us have either said this phrase or heard it from other people, at one time or another. Typically, the phrase is an excuse, delay or admission that the activity in question is simply not a high priority.

A 2014 paper by Katherine Milkman, Julia Minson and Kevin Volpp at the University of Pennsylvania explores how doing something you enjoy alongside an unpleasant task helps beat procrastination, increasing chances of longer term reward. Milkman calls it “temptation bundling”.

Milkman’s research is about using incentives as commitment devices to get people to exercise more, but the idea can also work when managing money – perhaps when doing the annual budget or calculating a return on investments.

Don’t delay longer
Milkman noticed that she went to the gym more often if she allowed herself to read a favourite book, The Hunger Games, while she was there. It’s all about creating motivation to tackle a task you’re inclined to put off. This frames it as a chance to do something really enjoyable as well.

Milkman suggests this can work especially well if the reward is some kind of guilty pleasure – reducing the guilt, and providing an incentive to get an unappealing chore done at the same time. One way of doing this might be by only listening to a favourite piece of music while doing your tax return. And if you’ve been delaying queuing at the bank to resolve a financial issue, perhaps pair it with an enjoyable activity nearby – like shopping or relaxing in the park.

Goodbye Sky – meet “Gymflix”
Milkman further suggests that a pleasurable activity, such as reading or watching TV, could be paired with technology that only works when an individual account-holder is using a specific machine at the gym. The incentive could be even stronger if a service was designed to prevent access to the same media elsewhere, she suggests.

“This study suggests that customers of existing entertainment streaming companies (such as Hulu Plus, Netflix, or Blockbuster Online) might value an account that allowed them to set “gym only” permissions on certain shows, preventing them from accessing these programmes anywhere except on a treadmill,” Milkman writes. “After the study, 61% of participants opted to pay to have gym-only access to iPods containing tempting audiobooks, suggesting demand for this commitment device.”

No time to waste
It’s easy to see how this approach might be helpful. Even if you make a regular “to-do” list and stick to it religiously, it can be hard not to procrastinate when a task is difficult. Present bias tempts us to delay even further when there is no immediate gain.

Furthermore, other research suggests self-control is a limited resource, and can be exhausted, like a muscle. If self-control is needed to finish a task you dislike, less is available for other things.

Know thyself
One difficulty with temptation bundling, Milkman admits, is that self-knowledge is important too: you have to know your weaknesses and be motivated to make a change. But, she suggests, governments or companies could help by designing incentives that “nudge” people towards temptation bundling; perhaps people could be paid or receive discounts for doing the right thing.

“Indeed, past research has demonstrated that people value mechanisms that prevent their future selves from making unwise decisions such as procrastinating (Ariely and Wertenbroch 2002),” she writes.

Achieving cruise control
Research has revealed several other ways to improve resolve, as scientist Dr Kelly McGonigal notes in this article. Having plenty of sleep, a balanced diet, the right amount of exercise and reducing stress levels helps the brain work better, and this itself can boost willpower.

It need not be a chore
Many of us were once regularly cajoled by parents into doing our chores with the promise of a small reward, such as pocket money or the chance to watch a favourite show. Temptation bundling may not always work – even with children. But it’s not hard to see how, with a little forethought, it can be used to improve savings habits, or reduce personal spending.

eZonomics team
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