CFI Blog

Monkey Brain Needs a Watch

“Time is a great teacher, but unfortunately it kills all its pupils.”
– Hector Berlioz

Hector Berlioz

Have you ever tried to make up for lost time? How did you do it? Did you hop into Wells’s Time Machine and go back? No? Why not?

It’s because you can’t actually make up for lost time.

When we stop to consider the assets we have in our lives, we think of the usual laundry list of items:

  • Our bank accounts
  • Our retirement accounts
  • Our house
  • Our car
  • Valuables and collectibles
  • You get the point

One asset that we have which never makes the list is

  • The number of days we have remaining on the earth

Why not?

There are four main reasons why we don’t consider time as an asset in our lives.

First, facing up to the fact that we have a finite number of days remaining on the planet means that we’re forced to face our mortality. All of us, no matter how healthy we eat, how much we work out, and how many sound preventive medical practices we undertake, will peel the garlic and find out what lies on the other side. Monkey Brain, our limbic system – the part of the brain that taught us to run away from woolly mammoths and that wants all pleasure now, future be da(ahem)ed – doesn’t like to think he’s anything but immortal and indestructible. Forcing ourselves to count time as an asset makes us stare into the realm of the ultimate uncertainty: what happens after we die. That uncertainty scares the bejeezus out of Monkey Brain, so he refuses to acknowledge it.

Second, it’s not a known number. We really have no idea when Death will knock on our door (“There’s a Mr. Reaper at the door!” “GRIM Reaper!”), so, because of the uncertainty surrounding just how long we have left, we don’t really think about it. It’s easier to think of an infinite future than it is to come up with a rough estimate of how long we have left.

Thirdly, time is an asset that shrinks as the days pass. Most of us have a pretty reasonable expectation that if we invest our money wisely in the markets and in other intelligent assets that, at some later point, we’ll have more money than we had when we first invested. It’s why we invest, after all; otherwise, we’d spend it all now on stuff. Time is the opposite. We’ll have less time left on the planet tomorrow than we did today. If we think about it too long, then it will be quite the bummer, and we’ll never look forward to anything.

Fourthly – and this one just came to me – we’ve never really thought of it that way until we started reading this article. Once you start to think of time as another asset you own, it makes perfect sense to include it in the list.

If time truly is an asset, does Monkey Brain treat it the same way he does money?

MIT’s France LeClerc and others set out to study how we treat time and when and how we’re willing to spend it.

We can group their findings into three main categories:

  1. Time is subject to mental accounting. We try, where possible, to group aspects of time into different buckets. As we saw in “Counting Money Isn’t the Same As Making Money,” Monkey Brain likes to create separate mental buckets for spending money. He does the same thing with time. As LeClerc’s team demonstrated, an example of this is when we have two errands to run in a weekend. We’d rather run both errands on the same day – ostensibly to get them over with – than do one errand on Saturday and one errand on Sunday. Even if the errands take the same amount of time, we’re mentally better-equipped to knock them out all at once than breaking them up. Running the errands involves a mental construct known as switching costs, and those lead to ego depletion, which we discussed in “How Ego Depletion Allows Monkey Brain to Buy Junk.” If we experience too many switching costs, we’ll run out of brain juice, and then we’ll wind up taking a side detour to go buy that 183” flat screen TV on the way home.
  2. Time is subject to price anchoring. When we look at prices, we always compare them to other items to create a comparison, and then we look at the relative prices rather than the absolute difference (to read more about this, check out “Monkey Brain Confuses Rates and Raw Numbers”). For example, if you went to the store to buy a pair of jeans, were in line to buy your $50 pair of jeans, and someone told you that 5 minutes down the street, another store was selling the jeans for $45, you might stop your transaction, get in the car, and head to the other store. However, if you were buying a $15,000 car and someone told you that the dealership down the street was selling the same car for $14,995, you’d almost never contemplate going to the other dealership. The reason is that the perceived savings, the rate of discount, isn’t enough to justify leaving. In the aforementioned MIT experiment, people were willing to pay $2 more to take a train that only took 45 minutes rather than 60 minutes, but if the trip was 7 hours, they would not pay $2 to get a train that took 6 hours and 45 minutes.
  3. We do not show loss aversion. As we saw in “Past Performance Indicates Your Future Investing Actions,” when we have lost money, we’re much more likely to gamble to try to get back to even; however, when we have gained money, we’re much more likely to take a certain outcome than to gamble to increase our earnings. The same does not hold true for time. The experiment the MIT team used was a situation where you’re waiting for a bus at the bus station. The bus will depart in 60 minutes. At another bus station, there’s a bus that will depart in 30 minutes and a bus that will depart in 90 minutes. You have a 50% chance of getting to the other station. Do you take the chance? The MIT experiment’s results showed that 70% of people stayed right where they were, as the fear of loss was greater than the joy of gain. Regardless of whether the subjects had gained or lost time, they were unwilling to gamble.

One striking difference arose from the last category. When asked why they were not willing to gamble to gain time, a vast majority of respondents said that they valued being able to plan for their time. Few people provide the same response about monetary gambles – they don’t talk about being able to plan for the money as being valuable.

Why, then, is planning for time so valuable when planning for money is not?

The predominant reason is that time and its associated activities are sequential and not fungible. The MIT team provides a great example of this. Let’s say that you have to drive an hour to the airport to catch your plane. Karma shines on you and all of the traffic lights turn green right before you’d slow down. You arrive in 45 minutes. You have 15 minutes to do what you want that you didn’t plan on. You can have a coffee in the airport while waiting for your flight. What you cannot do, though, it bank that time to use at some point later. You can’t speed the flight up by 15 minutes and enjoy that coffee at your destination. Even gained time is fleeting and probably can’t be used in the way that you’d really choose to use it.

Compare this to money. Let’s say that you find $100 in your couch. You can do whatever you want with that money. You can save it. You can buy 40 ice cream cones with it. You can give it away. You can save some and spend some. At whatever time you choose to use that money, you can do something with it. The money doesn’t just disappear if you stick it back in the couch until you decide what to do with it. You could wait weeks, figure out the perfect way to spend the money, dip back into the couch, and, assuming that the kids haven’t been digging around back there, the money will still be there.

Even though the amount of time we have on the planet is fairly fixed from the time we’re born – yes, we can undertake activities which can either significantly shorten or modestly increase the time we have to take in air – our perception of the value changes.

When we’re young, we can’t really do much of anything. We eat, sleep, poop, and cry as infants, and even as children, we’re not cognitively capable of advanced thinking or production. Even as young adults, while we may have the book smarts of academic stuffed into our brains, we don’t have the experience, wisdom, or maturity to make an enormous contribution (though some are, admittedly, exceptions). It’s not until we’re a little older that we reach our stride in terms of being able to have maximum productivity out of our time. That period lasts for a significant portion of our adult lives, but, at some point, both cognitive decline and physical frailties catch up to us, and our ability to be productive with time declines.

Thus, most of us come to a tipping point, or a point of inflection in our lives where we start to realize that our time is valuable, and that affects our mental calculations in what price we put on our time.

Even then, though, we miscalculate time because we don’t consider it in the same class of assets as we do our money. When we spend money, pain sensors in the brain light up; it’s the same reason that we spend more when we use credit cards than when we use cash. We’re physically losing something. We have to watch money leave our hands and not come back, and that causes Monkey Brain to howl a sad song in his cage.

When we waste time, though, we don’t have that same sense of loss. There’s no physical handing over of a token of the value of that time. It simply passes, like all time before has, with nothing to denote whether or not that time was well spent or wasted. There’s no marker to warn us that we’re facing a loss like a text alert you might receive from your bank when your balance gets below a certain threshold. It unpretentiously vanishes, never to be recovered, and unnoticed by Monkey Brain because there was no pain associated with its loss.

Time is not fungible, while money is. We can always make more money, but we can never make more time.

How do we value or time more appropriately?

  • Be cognitive of how about how much we have left. Barring unforeseen accidents, we have a pretty good idea of about how long we’re going to live. Most of us will live into our eighties. Some will live a little less and some will live a little longer, but as long as we don’t have habits that will cause an early demise or step out in front of the beer truck, we have a rough idea of how long we have left. It’s morbid, in a sense, but it forces us to acknowledge that there’s only so much time we have left and should encourage us to do more with what we have.
  • Reframe our decisions. When we have an hour to “kill,” do we really want to waste it surfing around the Internet, checking out Facebook and Twitter, or do we want to spend it well. Instead of mindlessly watching television, create choices: “I could watch television or I could read a book” or “I could check out Facebook or I could talk to my kids.” When we give ourselves choices, it will force us to think about the positive and negative consequences of the decisions we make. It will force us to actually make decisions rather than just defaulting into what Monkey Brain wants to do.
  • Bunch unpleasant tasks together. We are happier if we can get all of our time-sucking activities done all at once. We like that type of mental accounting, and if we are successful at it, then the mental accounting works in our favor. We’ll be even happier if not only do we bunch unpleasant tasks all together and get them over with (lest the Zeigarnik Effect kick in and make us even more miserable), but we also have intentional plans for valuable ways to spend the rest of our time.

Being intentional with our time takes effort, have no doubt. The easier, Monkey Brain path is to simply wile away the time in mindless leisure. When you look back on your years when you’re at the point where time is fleeting and short, will you be happy that you lived a full and fulfilled life, or will you rue all of the time you wasted?

The choice is yours.

Author Profile

John Davis
John Davis is a nationally recognized expert on credit reporting, credit scoring, and identity theft. He has written four books about his expertise in the field and has been featured extensively in numerous media outlets such as The Wall Street Journal, The Washington Post, CNN, CBS News, CNBC, Fox Business, and many more. With over 20 years of experience helping consumers understand their credit and identity protection rights, John is passionate about empowering people to take control of their finances. He works with financial institutions to develop consumer-friendly policies that promote financial literacy and responsible borrowing habits.

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