Present bias lurks all around us. After a long day of work, sometimes all we want to do is watch TV or scroll through social media. We know we should be working on our side hustle or building our ideal life – but we can’t motivate ourselves to do anything productive.
We justify that we have worked hard all day, and the reward for today is to get a little TV in. Unfortunately, this pattern repeats week after week, and we have no idea how come we haven’t worked closer to our goals.
One of the culprits: Present Bias
Present bias is the tendency to rather settle for a smaller present reward than to wait for a larger future reward in a trade-off situation. It describes the trend of overvaluing immediate rewards while putting less worth in long-term consequences.
The long-term consequences of these can be severe. For instance, let us say your goal is to build your side hustle so you can achieve financial independence and have an abundance of time wealth so you can do what you want when you want.
To grow that business, it takes time. If you do not work on it week over week and year over year, that business will not grow. Your idea will not lead to extra income, which you can use towards investing to retire early.
It seems present bias makes us sacrifice a rich-filled future life for a little more relaxing present one.
What Causes Present Bias
Behavioral Economist Sarah Newcomb says that present bias is caused by not picturing mental trade-offs well. We tend to have a larger, more clear picture of things that are happening right now. We discount and shrink things that happen far off in the future.
Why even Pursue Short-Term Rewards?
Does watching TV or scrolling through social media make us happy? Honestly, not really.
People find happiness by entering a flow state through challenging work or pursuing meaningful activities. People who actively work on achieving their goals report higher life satisfaction than those who do not work on their goals.
Not working on your long-term goals has a significant cost. There is a cost in the material by losing the possibility of making money or developing skills that could be used to pursue a dream job.
There is also a mental toll for repeatedly going to relaxation instead of working on your projects. Mostly, anxiety that you aren’t working on your goals, feeling bad about yourself, end up living a life you don’t want.
Instead, work on the goals that you want to most nights, and take the occasional nights off to decompress and relax.
How to overcome Present Bias
1. Overcome Procrastination
One of the main reasons for the present bias is we procrastinate. People procrastinate for different reasons, mainly either to avoid the negative feelings of doing the work or we overestimate our skills and under-estimate the time and difficulty of the task. Overcome these by just starting for 5 minutes and see for yourself what the task takes.
Head over to this post to learn which type of procrastinator you are and how to overcome procrastination.
2. Recognize the compound effect:
The compound effect is that working for even 20 minutes a day on a goal leads to a total of 121 hours working towards your goal, the equivalent of 3 full-time weeks. A little bit adds a lot over the year!
3. Think of your future self.
Fast forward to consider the needs, desires, and goals of your future self. Visualizing the future helps us to make better decisions in the present that lead to that ideal life.
4. Make a vision board.
Write down your goals and put them somewhere you can see every day. Having physical reminders helps you remember each day what you want to be working towards.
5. Recognize the Cost of your (in)Actions:
See how not pursuing your goals is costing you. Be it in skill development, money, or life satisfaction. Do something each day that the future you will thank you for!
Main Take-aways
- Realize that the small decisions every day are the big decisions that can shape the future of your life.
- Overcome present bias by using the compound effect to work towards your goals a little bit each day.
- Visualize your future self and the goals you want to accomplish. Let this determine what you tackle each-day and how you should spend your free time.
Action item
What is one goal you want in a year? How can you work towards it today and make it a reality? Break-out the steps and make them actionable so you do not procrastinate and suffer from present bias.
