The Scientific Reason You Shouldn't Make a Money Decision After 6pm


Exercise or sleep in? Eat breakfast at home or buy it on the way to the office? Meet friends for drinks or head home after work? We make thousands of choices every day—in fact, more than 200 are devoted to food alone. And according to a growing body of research, each one, no matter how weighty or frivolous, affects our ability to make sound judgments.

It’s called decision fatigue, and comes from the theory that willpower is a limited resource that weakens each time we use it. “Decisions deplete our self-control, so the more decisions we make in a given period, the less energy we have to think clearly and rationally about the next decisions,” says behavioral economist Zoe Chance, assistant professor at Yale School of Management.

Just like it’s exhausting to run 10 miles, our willpower is wiped out at the end of a hard day. As we burn through mental capacity, the activity in the part of the brain involved in self-control decreases, triggering us to make poor calls. (Like, say, binging on Ben & Jerry’s and Game of Thrones till the wee hours of the morning.)

Now, a new study reveals how this phenomenon can affect our financial lives. In it, the authors discovered that participants who engaged in challenging cognitive tasks experienced mental fatigue that “enhanced the propensity to make impulsive [economic] choices [and] favor immediate rewards.”

Translation: After spending hours churning away at work, we’re more likely to binge shop online, “overspend when going out late at night or take short-cuts when completing tax returns,” Chance says.

Evan Polman, a marketing professor at the University of Wisconsin School of Business, adds that people tend to defer financial decisions when they’re mentally zapped. And of course, the longer you put off something like figuring out how to pay off your debt or when to start investing, the worse off you’ll be.

Related: How I Finally Got Over My Fear of Investing

So what can we do about it?

Take willpower out of the equation whenever possible. “Lock yourself into ‘good’ decisions, like automatic payments into [investing accounts] or toward debt, so that you don’t have to decide each time whether and how much to save,” Chance says.

For situations where you can’t rely on automation, set up basic money parameters—say, a daily spending limit of $50. With established guidelines to fall back on, you’ll avoid tapping into your precious decision-making reserve.

Brainstorming ways to routinize your life can also help—like rotating between the same breakfast dishes, sticking to a few machines at the gym or taking a cue from Mark Zuckerberg and adopting a basic work uniform.

When it comes to one-off financial tasks or decisions, be strategic about timing. Do holiday online shopping on weekend mornings when you’re fresh, for example. And if you have to make a decision late in the day, try to do something restful beforehand, like taking a nap, reading or going for a walk. Or break out the cheese board: Having a snack can also sharpen your judgment.

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