When faced with the choice between enjoying the moment and planning for the future, the squirrel knows what to do. Do you?
Many of us don’t have the sense God gave a squirrel. Consider this choice: Buy refrigerator A, which costs $50 less than fridge B but uses $50 more in electricity each year, or fridge B, which saves money in the long run. Select fridge B and one year later you’ll break even, after which you’ll save $50 annually. Yet despite the future savings, one study showed that most people faced with this decision would choose to buy the cheaper but less-efficient fridge.
In this situation, as in many others — notably, neglecting to sign up for your company retirement plan — immediate financial gratification proves to be a prime motivator. That’s the case even though the short-term rush pales in comparison with the long-term savings realized from picking the more-efficient appliance. Squirrels, by contrast, stow nuts for the winter even when it means skipping an acorn or two in October.