Do You Want to Commit? Put Your Money Where You Want Your Time to Go

4 May

Do You Want to Commit-Put Your Money Where You Want Your TIme to GOWe often use money as a way to force ourselves to commit. This is evident in many areas: monthly gym membership fees vs. home exercise equipment or routines; free online college courses (The Truth About MOOCs: Only 10% Of Students Actually Finish Them) vs. paying for a college course; buying a book (we really want to read it) vs. checking it out from the library (maybe I’ll get around to reading it).

Is is that we are bored (The dirty little secret of online learning: Students are bored and dropping out) or is it that people have a hard time committing without putting their money where they want their time to go?

The basic concept behind these examples is loss aversion.People hate to lose what they have or lose money they’ve invested, whether in the stock market or in a gym membership.

Think about the sales of so many apps. What is the benefit to the user to pay for an app as opposed to using it for free? I think many times we buy an app only after we justify to ourselves that we will actually use it. The small amount of money involved-say $1 to $5-can also be enough to help us keep that commitment, at least initially. Once we feel like we “got our money’s worth”, the chances of dropping the commitment increase.

Think about many purchases you make and how they reflect your commitment.

You buy a new pair of running shoes because you want to strengthen your commitment to start or get back into your training routine

You buy a gardening book because you really want to start that backyard garden.

You purchase a magazine subscription because you really want to keep up on your topic of choice (ex. photography, economics).

You buy a set of 10 yoga lessons to make sure you show up every week.

For many of these ideas there are free or less costly options available. You may really need a good pair of running shoes to protect your feet, but why not check the gardening book out from the library? Or why not read all the articles on your topic of interest that are available for free on the internet? Why not buy that yoga DVD that costs a tenth of the cost of lessons?

I’m not saying one alternative is better than another. Spending money on the rights things is a great investment. It does help us commit and reach our goals. I’m saying that understanding why and how our purchases affect our commitment allows us to make better commitments and spend our money more wisely.

We may also benefit by recognizing that a monetary commitment can lull us into a sense of progression. We think we made progress on a goal because we put up money. But buying running shoes is different that actually running three times a week. Buying a set of yoga classes is different than showing up every week even when things get busy.

It is better to think through all of the things involved in keeping some commitment you want to make. Besides the money involved, do you really have the time? If you don’t have or won’t make the time, that monetary investment probably isn’t worth it. Money cannot substitute for time, although I think at times we would like it to. It is often easier to put up the money than to put up the time.

My suggestion: carve out and commit to the time investment. Then, evaluate and utilize the monetary investment to best reinforce your time commitment.

It can pay (pun intended) to figure out ways to best use our money as commitment strategy.

Tell us in the comments what ways you use money to make commitments stick.

Note: There are other clever examples of using this concept to make commitments stick.

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