Tackling those boring money tasks
18 August 2016
Managing money can be a hassle, but combining it with a pleasurable activity, might be a way to get the job done.
According to an academic paper from the University of Pennsylvania, one way to overcome procrastination can be doing something you enjoy alongside an unpleasant task. The concept is known as ‘temptation bundling’.
Researchers Katherine Milkman, Julia Minson and Kevin Volpp, in the paper, explored the idea of using incentives as commitment techniques to get people to exercise more. However, the idea can also work when managing money – for example, getting around to doing that must-do tax return or annual budget.
As part of the research, Professor Milkman noticed that she went to the gym more often if she allowed herself to read a favourite book on the treadmill.
Mixing pleasure with pain
The same principle can be applied to completing the tax return by listening to a favourite piece of music at the same time. Or if you’ve been putting off resolving a financial issue that requires a trip to the bank or to a financial adviser, perhaps pair it with an enjoyable activity nearby – like shopping or relaxing in the park.
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 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.
To read the full article, go to ING’s eZonomics website. eZonomics combines ideas around financial education, personal finance and behavioural economics to produce practical information about the way people manage their money – and how this can affect their lives.
It contains informative blogs, tips to manage money better, as well as articles and videos on topical and interesting subjects in personal finance. The latest reports from ING’s International Surveys, which show savings, borrowing and investment patterns around the world are also accessible on the website.
eZonomics is on Twitter and produces a regular newsletter of highlights. The eZonomics team would like to hear from readers and can be contacted through the feedback options on the website’s home page and at email@example.com.