Pay now, consume later

What would you do if you could choose between taking a family vacation this month or in December. Which would you prefer, assuming that both months are convenient? It turns out that behavioural psychology can help you make the best choice.

Let's look at credit card purchases. The advantage of using a credit card is that you can buy product immediately and pay for them later. . However, research has shown that consuming now and paying later does not result in economic and psychological well-being.

Importantly, consuming now and paying later denies the joy of anticipation. Suppose you are on a diet but allow yourself the luxury of having a sinful chocolate ice cream each week. You can have the ice cream immediately or you can defer the consumption till the next weekend. When you consume immediately, you obviously savour the rich taste of the ice cream. But when you defer consumption till the next weekend, you also get additional happiness from anticipating the actual pleasure of consuming. And this additional happiness is free! Deferring consumption could be, hence, optimal.

The pleasure of anticipation

You can extend this logic to your vacation as well, whether you pay now or later. Choosing to take the vacation in December rather than this month is likely to give you more pleasure. Besides, anticipating an upcoming vacation brings you more happiness than recalling one that you already had!

The logic of deriving more happiness from deferring consumption can work to your advantage, especially with your food habits. Suppose you have to choose either fruit and salad lunch or a sumptuous meal. Your choice would typically depend on when you have to consume the meal. If the choice is for today's lunch, you will most likely prefer the three-course meal. If, however, the choice is for tomorrow's lunch, you may prefer the fruit and salad meal. Paying (or shopping) at the supermarket today for a healthy meal that you will eat tomorrow can change the way you consume.

COMMENT NOW