A new Cornell University study finds that our brains are powerfully biased toward earning, making us far more focused on earning money rather than saving it.

The findings may help explain why Americans are surprisingly poor at saving money: The average American working-age couple has saved only $5,000 for retirement, while 43 percent of working-age families have no retirement savings at all, according to a 2016 analysis of a Federal Reserve survey.

“Fundamentally it comes down to this: saving is less valuable to our brains, which devote less attentional resources to it,” said study co-author Dr. Adam Anderson, associate professor of human development at Cornell University.

“It’s more than a financial problem of making ends meet. Our brains find saving more difficult to attend to.”

Andrew conducted the study with lead author Dr. Kesong Hu, a postdoctoral fellow in Anderson and De Rosa’s Affect and Cognition Lab, and co-author Dr. Eve De Rosa, an associate professor of human development.

The study involved an experiment in which individuals could earn or save money by responding to how different colors marked these opportunities. The researchers gave the participants a timing perception task with these colors, measuring how quickly they processed colors as an implicit index of the potency of earning and saving for the brain.

In the first experiment, 87.5 percent of the participants earned more than they saved, and 75 percent developed warped temporal perceptions of the colors. The participants reported seeing earning colors appear on the computer screen first when, in fact, the savings colors did.

In subsequent experiments, this temporal bias remained even when color associations with earning or saving were hidden and likely unconscious. The researchers have termed this bias “savings posteriority.”

“Even without bills to pay, our brains put a thumb on the scales, making it easier for us to earn than save,” Anderson said.

De Rosa added that the act of saving is so devalued and unattended that we perceive events associated with saving as occurring later in time.

The warped time perception may or may not be a mechanism for the cognitive bias to earn more than save, Anderson said. “At a minimum, it’s an indication of how strong this bias is, that it can even warp our perception of time,” he said. “Imagine what it could do to our bank accounts.”

The temporal bias occurred even when the researchers changed the economic task to ensure study participants received an equal amount of earnings and savings. And the bias against saving persisted when researchers defined saving as preventing the loss of what the participants already earned or as putting away money for future use. Either way, the results were the same: earning beat saving.

If you want to start saving, you can train your brain to pay attention to it, say the researchers. They call this “attentional retraining.” The benefit is not so much in the everyday cash value of what one saves, but in building the brain’s capacity to pay attention to saving, which, like money in the bank, will increase over time.

“It’s practicing attention and intention to save, to strengthen the value of it for your brain. It’s not the amount of dollars that matters,” Anderson said.

The findings are published in the journal Nature Communications.

Source: Cornell University