The Why #92: Why do people go on holiday when they still owe me money?

Hardhat
4 min readAug 15, 2024

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Question submitted by Emery, Ballarat

Not going to lie Emery, this one gets my blood boiling too.

It’s a special kind of rage when you open up Instagram, start to scroll, and then BOOM! There he is! That guy! How on earth is he living it up at some beach club in Bali when last time you spoke, he needed a little more time to get you back the $150 he owes you from that bucks night last November?

You’d never borrow a stapler without returning it the minute your pages were secure. What sort of sick, twisted individual ignores the voice in their head said saying ‘we should probably give Emery back the money he was kind enough to lend us rather than blowing it on a holiday we clearly can’t afford’? And as if the guilt isn’t enough, what about all of the future awkwardness these people are signing up for?

Are they crazy? Are they masochists? Or are they just human?

Temporal Discounting

Temporal Discounting refers to our very human tendency to reduce the value of things that are further into the future, while overvaluing things in the here and now. The more distant and hazier a future benefit (say, a summer six pack or a comfortable retirement), the more easily we trade them for things that bring us pleasure in the moment (hello cronut and leather jacket).

Research into online grocery shopping by the aptly named Milkman, Rogers & Bazerman (2009) identified a striking correlation between basket healthiness and order delivery dates.

When orders were made with a delivery date of a week out or more, the baskets were far more likely to contain enough fresh fruit, leafy greens and healthy bits and pieces to make even the most discerning mother proud.

However, as the delivery dates edged closer and closer to ‘now’, short term interests took over. Healthy snacks were suddenly switched out for ice cream, chocolates and other indulgent ‘sometimes foods’ with reckless abandon.

Unfortunately, this research confirms something we’ve all long suspected: our logical, rational, long term selves are no match for our emotional, demanding short term ones.

When it comes to saving for the future, tomorrow’s cars, holidays and dream homes are all at risk when something fun, yummy or thrilling is on the ‘right now’ menu. It’s no wonder that ‘Buy Now, Pay Later’ has become an option for almost everything, and the government has had to make it compulsory for people to save for their own retirement.

Unfortunately for our wallets Emery, this means it’s easy for our jetsetter friends to prioritise squeezing in one more beachside getaway over returning the money they owe. :(

For Challenger Brands that meet short term needs, go pedal to the medal on instant gratification, safe in the knowledge that your audience is wired to respond. For those in the business of longer term benefits (superannuation, higher education, sustainability), look for — and if you need to, create — short term hooks, goals or benefits that help scratch the itch we feel today.

Behaviourally Yours,

Dan Monheit

PS If you missed the last edition, you can still check out why there are so many luxury stores in airports here.

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