Can’t Stick With It? Put Your Money On The Line

Fitness pursuits take time.

You’ll see some results along the way – whether directly related to your goal, or indirect benefits – but whatever that end goal may be, there’s a period of time where you may not be seeing the “pay-off”.

The issue with this time interval when you’re not seeing results is that you’re more likely to prioritise and engage in behaviours/activities where you receive an immediate reward.

In behavioural economics, this is called ‘present bias’. (1)

This could look like choosing to watch a movie (feels good immediately) instead of working-out or choosing to work a few more hours overtime for the bigger pay check instead of leaving some time for health and fitness behaviours.

If you struggle with this, there are ways you can leverage these biases to help you prioritise the health and fitness behaviours you know you should be doing.

Putting your money on the line is a strategy worth trying.

Financial incentives

Financial incentives can be an effective tool for helping people change their behaviours (probably because of its capacity to leverage our present bias – receiving or losing money is an immediate result!).

Whether it’s receiving return contracted cash for weight loss, a cash reward for participating in an online fitness program, discounts/coupons that can be used for better food choices, there is evidence that these financial incentives can be useful. (2) (3)

To make these financial incentives even more effective, you can combine it with the following psychological/behavioural observation called ‘loss aversion’.

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Loss aversion

The financial incentive can come in the form of a penalty if you don’t engage in the behaviour. This may be a better way to approach it as the pain of losing your money is more powerful than the pleasure of gaining (‘loss aversion’). (4) (5)

How to use this to your benefit?

So, the financial incentive can be used to leverage your present bias and then to further enhance its effectiveness, it can take the form of a penalty for not engaging in your desired behaviour.

A financial commitment contract is a good way to implement this and has been shown to be a somewhat effective tool for adhering to weight loss goals (6).

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Here’s how to do it:

1. Make a contract with a friend, partner or relative who you can obviously trust and will hold firm on a contract.

2. Deposit your money to them (a large amount – you want a strong emotional response) and agree on the duration/frequency and behaviour/behaviours (with goals) you’re going to engage in. You will also need to agree on a way you can verify your behaviour with them.

For example: Your behaviour could be “walking a minimum of 5000 steps a day” and it could be verified by sending/showing your friend/partner/relative a screenshot from the health app on your phone of your weekly steps.

3. If you don’t engage in the behaviour you set out, you lose your money. The money could go to a charity, an organisation you’re morally opposed to (adds even more incentive) or simply your friend, partner, or relative gets to keep it (incentive for them to keep checking-in!).

What are some behaviours you could implement that would be beneficial?

• More steps (eg. 5000 a day minimum)

• Consistent strength training (eg. start from home a few times a week)

• Better nutritional choices (eg. more protein and more veggies)

• Implementing stress management and sleep strategies (eg. tips for better sleep)

Benefits to using this strategy:

1. Leverages present bias and loss aversion: There’s an immediate consequence to not engaging in the behaviour.

2. Includes aspects of social support and self-efficacy (both important for sticking with your behaviour!): The person you’ve made the contract with (social support) and the fact that you choose the behaviour and goals (you’re confident you can succeed at it, otherwise its going to be very difficult to put your money on the line).

A potential drawback

This strategy centres around negative reinforcement (ie “I have to do this otherwise I’ll lose my money”).

I’ve discussed in previous posts how important positive emotions are for your health and fitness pursuits.

So, hopefully this strategy is used to kickstart your behaviour until you start seeing some of the positivity-inducing benefits. Using the contract example above (the 5000 steps a day minimum), after the initial obstacle of engaging in it consistently (thanks to the contract), you may begin appreciating the time outside with the sun on your skin, a chance to move, think and solve subconscious problems, relieved stress after the walk and so on...

Ideally, over time, you’ll want to engage in the behaviour because it helps you feel good, not because you will lose money.

The Takeaway

You may be more inclined to choose behaviours and activities where you receive immediate rewards over ones where the rewards are received in the future (‘present bias’). The issue is that health and fitness pursuits often take an extended period of time where you may not be seeing your efforts rewarded. By using a commitment contract with a financial incentive, you can leverage present bias, loss aversion and social support/self-efficacy to help you engage in behaviours that will benefit you in the long term.

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References

1) O’Donoghue, T., & Rabin, M. (1999). Doing it now or later. American Economic Review, 89(1), 103-124.

2) Matson-Koffman, Dyann M et al. “A site-specific literature review of policy and environmental interventions that promote physical activity and nutrition for cardiovascular health: what works?.” American journal of health promotion : AJHP vol. 19,3 (2005): 167-93. doi:10.4278/0890-1171-19.3.167

3) Sutherland, Kim et al. “Impact of targeted financial incentives on personal health behavior: a review of the literature.” Medical care research and review : MCRR vol. 65,6 Suppl (2008): 36S-78S. doi:10.1177/1077558708324235

4) Tversky A, Kahneman D. The framing of decisions and the psychology of choice. Science 1981;211:453–8. 10.1126/science.7455683‍

5) https://www.behavioraleconomics.com/resources/mini-encyclopedia-of-be/loss-aversion/

6) Lesser, Lenard I et al. “Association Between Monetary Deposits and Weight Loss in Online Commitment Contracts.” American journal of health promotion : AJHP vol. 32,1 (2018): 198-204. doi:10.1177/0890117116661157

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