How It Affects Us and How to Overcome It


When I was in Middle School, my twin brother bought a stereo. Not a portable Boombox, but an entire component system on shelves that took up a large corner of his bedroom.

I remember, to this day, being outside when he arrived home with his purchase. I was shocked.

I wasn’t surprised necessarily that he had bought such an impressive stereo system. I was shocked he had enough money to buy it.

We received the same allowance from mom and dad. We worked the same amount of odd jobs (mowing lawns, etc.). And yet, I had nowhere near the amount of money required for such a purchase.

Looking back, it might have been a foolish question, but I remember asking him directly, “How in the world did you have enough money to buy that?” I must have been expecting to hear that he had picked up a second job without me noticing.

But instead, he simply said, “I’ve been saving up my money for quite awhile to buy this stereo.”

In my head, I quickly recounted the amount of money I had spent on baseball cards and candy over the previous months and figured the amount in my head. The Math added up.

Had I not spent money on candy could I have bought something bigger and cooler? Is it really that simple? Just decide to spend less and save more?

Maybe it is that easy, maybe it isn’t.

Enter “present bias.”

Present bias is the tendency for humans to settle for a smaller reward in the present rather than wait for a larger reward in the future, in a trade-off situation. It describes the trend of overvaluing immediate rewards, while putting less worth in long-term consequences.

For example, would you prefer $100 today or $110 in one week?

The wise decision is to wait a week. But a large percentage of us tend to choose the smaller amount today. That tendency is called “present bias.”

Brain scans have been done to figure out why so many of us choose the smaller reward in the present moment, rather than waiting for the bigger pay-off. And the science tells us one of the reasons is because the idea of a “present award” activates the reward center of our brain to make the decision rather than the areas of our brain that might be better at decision-making.

Of course, the example of present bias above doesn’t have too many real-world implications. Very rarely will a stranger approach us on the street offering $100 today or $110 tomorrow.

But the implications of present bias can be seen in countless situations:

  • Would I rather hit snooze to sleep-in this morning… or get up and exercise?
  • Would I rather spend money on a concert tonight… or pay down extra on my credit card debt next month?
  • Would I rather stay up late and watch another episode of this Netflix series… or feel rested in the morning?
  • Would I rather stay home this afternoon… or make an appointment for my health screening?
  • Would I rather enjoy this ice cream right now… or keep the pounds off tomorrow?
  • Would I rather do the work today… or put it off until tomorrow?
  • Would I rather accept a new job today with a higher paycheck… or keep one that allows me longer-term work/life balance?

In each case we can see how the promise of an immediate reward overtakes our thinking and moves us away from longer-term, wiser decisions.

These effects can be seen in our finances, our health, our habits, our homes, our families, and our opportunities in life.

We would be wise to not allow present bias to keep us from better, healthier, more life-fulfilling decisions. But how?

How do we overcome present bias?

Here are seven ideas:

1. Become aware of it.

Some people are more susceptible to present bias than others. If you are, become aware of the pattern in society and yourself.

At the very least, starting today, you have a word for it and know that you are not alone.

2. Work to notice when it is happening to you.

It is one thing to understand the principle. It is something entirely different to recognize when it is affecting your decisions.

To begin noticing it more, make it a specific point in your life over the course of a few days (including a weekend) to think a lot about the principles of present bias and look for as many examples in your life as you possibly can. You’ll likely see the principle at play far more than ever realized.

3. Access the long-range decision-making portion of your brain by considering your long-term goals.

One of the first steps I encourage people to take in their decluttering journey during the Uncluttered Course is to write out why they want to own less.

“I desire to own less so that I can ________.” And I ask them to tape that sentence to their mirror or refrigerator—somewhere they will see it often.

This serves to keep us focused on our longer-range goals and keeps us motivated in the present to make wise choices about our time, money, and even decluttering efforts.

The same principle can be used to overcome present bias. The clearer we get on our long-range goals and priorities, the quicker we can access them when they come up against immediate gratification.

4. Focus on the immediate satisfaction of delayed gratification.

One strategy discovered by researchers and published in the Harvard Business Review focuses on our potential to better accomplish long-term goals when we consider the immediate gratification of them.

For example, people who say they have fun while exercising are more likely to exercise. Those who enjoy their field of academics, study more. Those who enjoy the taste of healthy food, eat healthier.

This may seem like common sense, but it can have a profound impact on us. If we focus on the positives of wise decisions and the immediate gratification that we get from the behavior, we can move that action into our present bias.

Choose exercises you enjoy. Think of how good it feels to go to bed each night. Consider the positive aspect of putting in the work today. Notice the specific enjoyment of seeing your savings account grow.

Focus on the immediate enjoyment that you can find in even delayed gratification.

5. See if you can remove the decision altogether.

In a fascinating study, researchers discovered how automatic enrollment in a retirement program changed people’s behavior. When employees were asked if they wanted to opt-in to a 401k retirement policy, only 40% took the opportunity (present bias). But when employees were automatically enrolled in the program, only 10% opted-out, leaving 90% participation.

Lesson learned? When the opportunity for present bias is removed, we tend to make wiser decisions. See if you can remove the opportunity for present bias in your life. For example: automatically deduct for savings/investment, use an app to limit your phone use after 10pm, keep healthier food in your home.

6. Place a waiting period on tempting decisions.

Do you often find yourself overspending your budget or buying things you don’t need? Maybe sales or discounts or weekends become triggers to overshop?

Create a 48-hour waiting period on your shopping decisions (especially in areas you are prone to make bad decisions). This waiting period will counter the immediate reward center of your brain dictating your present bias.

7. Work to imagine how Future You would decide.

Present bias is strong and ingrained or it wouldn’t be an issue.

The steps above can help us to overcome it and lead to wiser decisions. No doubt you’ll find some strategies more helpful than others.

But one closing strategy is to picture how Future You would decide the decision in front of you.

  • Would future you, tired in the morning, choose to binge-watch another episode?
  • Would future you, struggling to pay the credit card bill, get take-out food again?
  • Would future you have saved more for retirement?
  • Would future you have exercised more, eaten healthier, or spent more time in solitude?

If the answer is yes, do him or her a favor today and choose wisely.

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