Nudge of the Week: Future Committing

Getting people to commit to having a cost right now is very hard. It’s much easier to get them to commit to a higher cost in the future.

This is the principle behind “buy now, pay later” policies.

Another example comes from the Nobel prize economist Richard Thaler. Getting people to save their income now is hard. But getting people to commit to saving their future raises in income is much easier. So instead of saving 10% of your income now, which nobody feels comfortable doing, you commit to saving 50% of any future increase in income.