17/05/2017 11:08 BST | Updated 17/05/2017 11:08 BST

Your Psychology Is Costing You Money: Here's How To Fight Back

How you think about the future has a big impact on how you spend your money. Human psychology has some quirks and understanding them may help you save.

Why we can't wait, even if it saves us money

If you wait you can save money: wait for prices to drop, wait for a sale or wait for cheaper delivery.

But most people don't wait. In fact, people are so averse to waiting that they're willing to pay extra not to.

Amazon Prime members pay £79 per year for the benefit. Deliveroo customers pay £2.50 for restaurant food to be delivered. And Sainsbury's Chop Chop, an instant delivery service for groceries, costs extra - just to save you that 5 minute walk.

Why are you willing to pay extra?

Most people say it's because they can afford it or that the wait isn't worth the cost. These answers make sense, but when the question is asked in a different way, the answers change:

Would you rather receive £20 in a year, or £19 in 364 days?

These same people who were willing to pay extra for instant delivery, now say they'd rather receive £20 in a year. That one-day delay just doesn't seem worth it when it's so far away. Pain in our far future feels more like a minor inconvenience.

Daniel Gilbert, author of Stumbling on Happiness, explains how our psychology has some problems when it comes to thinking of the future.

When we imagine something in the far future, a long way away on the time horizon, we see it in more of a hazy light. Things are blurred and general. For example, what does a good day look like in 10 years time? What do you imagine?

Most people respond with, "on the beach", "with friends and family", or "just happy". General visions and feelings.

If asked, what does a good day look like tomorrow? People respond with a variety of things, "Cooked breakfast, walk the dog, lunch with friends, read a book, play video games" etc. The picture is more acute, more detailed.

The same is true when imagining pain. A delay in the near-future feels sharper than that in the far-future. And we're willing to pay more to avoid it.

Gilbert writes, 'most people would rather receive £19 today than £20 tomorrow because a one-day delay that takes place in the near future looks (from here) to be an unbearable torment'.

A one day delay in the near future should be the same as a one day delay in the far future. One day is one day. And yet, it's not. Our psychology has a flaw and it costs us money.

Why we should wait, even it if hurts

Our brains get more excited (and anxious) when imagining the near future than the far future. It can see it in more detail and that triggers the hormones. However, this makes us susceptible to whim.

We need to be critical of our feelings and especially what we imagine them to be in the future, in the context of buying things. Most money saving experts talk about cutting down to save money. They fail to understand why we want it in the first place.

Next time you're considering paying extra to avoid a delay, imagine this choice was being presented in the far future. "In a year's time, if you had to choose...." Use that far future, the one with less emotion, to help you make your choice.

As Shakespeare wrote in Macbeth,

Thy letters have transported me beyond

This ignorant present, and I feel now

The future in the instant


Tom Church is co-founder of, a money saving community where people share deals, voucher codes and freebies with each other.