{"id":27317,"date":"2022-10-14T16:35:05","date_gmt":"2022-10-14T23:35:05","guid":{"rendered":"https:\/\/www.becomingminimalist.com\/?p=27317"},"modified":"2022-10-14T22:02:30","modified_gmt":"2022-10-15T05:02:30","slug":"present-bias","status":"publish","type":"post","link":"https:\/\/www.becomingminimalist.com\/present-bias\/","title":{"rendered":"Present Bias: How It Affects Us and How to Overcome It"},"content":{"rendered":"\n
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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.<\/p>\n\n\n\n

I remember, to this day, being outside when he arrived home with his purchase. I was shocked. <\/p>\n\n\n\n

I wasn\u2019t surprised necessarily that he had bought such an impressive stereo system. I was shocked he had enough money to buy it.<\/p>\n\n\n\n

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.<\/p>\n\n\n\n

Looking back, it might have been a foolish question, but I remember asking him directly, \u201cHow in the world did you have enough money to buy that?\u201d I must have been expecting to hear that he had picked up a second job without me noticing.<\/p>\n\n\n\n

But instead, he simply said, \u201cI\u2019ve been saving up my money for quite awhile to buy this stereo.\u201d<\/p>\n\n\n\n

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.<\/p>\n\n\n\n

Had I not spent money on candy could I have bought something bigger and cooler? Is it really that simple? Just decide<\/em> to spend less and save more?<\/p>\n\n\n\n

Maybe it is that easy, maybe it isn\u2019t.<\/p>\n\n\n\n

Enter \u201cpresent bias<\/em>.\u201d<\/p>\n\n\n\n

Present bias<\/a> 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.<\/p>\n\n\n\n

For example, would you prefer $100 today or $110 in one week?<\/p>\n\n\n\n

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.”<\/p>\n\n\n\n

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 \u201cpresent award\u201d 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.<\/p>\n\n\n\n

Of course, the example of present bias above doesn\u2019t have too many real-world implications. Very rarely will a stranger approach us on the street offering $100 today or $110 tomorrow.<\/p>\n\n\n\n

But the implications of present bias can be seen in countless situations:<\/p>\n\n\n\n