When you think about life, it can feel like you have a long time to focus on savings goals you want to eventually achieve. But sometimes life can seem to pass by in the blink of an eye, so it's important to remember to have fun with friends and family, too. Sometimes, the two feelings contradict – do you have dinner at a popular, new restaurant now, because life feels short, or do you stay home for the evening, because you feel like you have a long lifetime ahead? Economists Richard Thaler and H.M. Shefrin[1] recognized this contradiction and thought about how it applies to financial decision-making and saving practices. They offered some solutions, too.

Generally speaking, the world is made up of short-term doers and long-term planners. It’s possible to plan ahead and still make the most of the time you have now, but you may face challenges matching up the things you do with the things you want in the future. The tension between how you live life and how your brain plans your goals can keep you from meeting your expectations — unless you learn how to balance your focus.

The challenge is getting your short-term self to act in ways that support your long-term plans. The good news is that you can learn to be more effective at this.

Decide to Save — Then Do It

A paper written by Thaler and Shefrin explains how to align your "doing" and "planning" sides. One method is simply making up your mind to start saving more money. It might seem unbelievable, but some people really are able to commit to it and then do it!

However, most people have to do a little more work to convince themselves. Learning more about finances helps some people. Others find it helpful to write down their goals or write letters from their future selves to their present selves. You may even have to try all of these techniques, but that’s okay. Do what works to get you started. Then, find ways to help balance your life. For example, if you can plan on going out only one night a week, tell your friends that you are looking forward to getting together then, instead of feeling sad that you are staying home tonight.

Track Spending

Another method is to start keeping track of your spending. One simple, old-fashioned budgeting technique is to write down everything you spend money on during a month in a notebook. This advice is basic, but it helps many people see where their money goes. There are various ways to keep track of your money.

In academic terms, Thaler and Shefrin refer to tracking as a tax that makes people think twice about their less-than-ideal habits. Keeping an eye on your spending can help you, in turn, make a budget for saving, and saving money to meet goals offers built-in rewards. As you track how close you are to having enough money for a fun vacation or a down payment on a house, you're inspired to keep up the good work.

Change Incentives for the Better

A final method involves finding a way to alter your incentives to help balance having fun now with saving for the future. In their paper, Thaler and Shefrin use the example of professors deciding to present papers at a conference as a way of giving themselves deadlines, thus inventing an incentive to get the work done. For your finances, this could mean challenging your spouse to see which of you can save the most money in a month or taking turns planning low-cost nights out with your friends.

Your finances don't have to be as contradictory as life can be. You can set some goals to satisfy your long-term planning needs and then come up with ways to make working toward your goals part of your short-term activities. Thinking about a great next step if you are looking to make a change?