Obviously, we all have heard the advice that we should be saving for retirement now because the earlier you start, the more time the money has to grow thanks to the magic of compound interest. So if the fact is that you amass a much larger amount of money by starting sooner, then why do we talk ourselves out of saving now in favor of a very nice car, more dinners out, a lot of shoes, [insert your own excuse here]?

The difference a day makes…

Well, it’s called temporal discounting, in scientific terms, which means the time period until retirement (30 years or so) seems so distant its values decreases to you compared to more current matters.

Some new research published in the Journal of Psychological Science bears this out: Researchers recently studied whether it makes a difference if you think about doing something in “years” versus “days” or “months” for the same time period. They found that when you think about future events in days it feels sooner and you are more apt to act on them. Thinking this way in attacking both short-term and long-term financial goals makes them seem more important, imminent and doable.

In one part of the study, three scenarios were described (18 years until college and 30 or 40 years until retirement) and two time metric descriptions (days and years). Participants were told how many days (6,570, 10,950 or 14,600) or years (18, 30, or 40) before each event and asked when they thought they would start saving.

I might have thought the years sound quicker because the number is smaller (10,950 days versus 30 years until retirement). But the research found differently.

The study participants said they would start four times sooner when told how many days rather than how many years they have until their child goes to college or they want to retire. The research found that considering your retirement, or any financial goals, in days rather than years leads you to feel more connected to your future self and the future event. This leads to discounting the future less over the present so saving for the future, for example, feels less painful.

Financial goal break-down examples:

  • Saving up a $1,000 emergency fund: It’s really just $2.73 per day for 365 days (that really is the cost of your coffee or latté every morning!) instead of a whole year away until you have $1,000.
  • Complete a credit repair program: Call it 540 days instead of 18 months or a year and a half and start crossing them off on your way to better credit in your first 30 days.
  • Saving for next year’s vacation: That’s just 365 days away instead of 12 months or one year.
  • Retiring at age 65: Instead of putting off saving for your retirement in 30 years, start today and you’ll just have 10,949 days to go and more money in your account the sooner you get started.

Picture your future self achieving those goals

If you want to add power to your plans, picture them in your mind and set your intentions firmly on your financial goals. If you have no emergency savings, picture yourself with that bank account balance and not being scared when the car breaks down and needs a major repair. Picture your future self with a high credit score, on a vacation that’s not entirely put on a credit card, feeling secure [in your dream here] in being able to retire. Play around with a savings goal calculator to see how much more you can save by starting sooner rather than later. Your future self will thank you.