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How Financially Impulsive Are You?

Researchers asked over 40,000 people if they would prefer £45 in three days or £70 in three months.

Those who wanted the smaller amount were also impulsive in other areas of their life.

They were more likely to want the immediate pleasure of a cake, an affair or a puff on a cigarette than consider the long-term effect on their health or relationship.

The study by University College London found people who are young, poorly educated and on a low income were the most financially impulsive.

Nearly half of those surveyed preferred the smaller sum of money, the Personality and Individual Differences journal reports.

Researcher Dr Stian Reimers, from UCL, said it was possible to learn self-control and conquer impulsive behaviour.

He said: “One of the big questions about people’s financial planning is whether decisions to spend or save come from personal knowledge and experience of money matters or whether they reflect someone’s personality more generally.

“Our research shows that people with an impulsive money-today attitude ignore the future in other ways.

“For example, they are more likely to smoke and more likely to be overweight, which may reflect a preference for immediate pleasure of nicotine and food over long-term good health.

“People who chose to take the smaller amount of money were also more likely to admit to having had an affair in recent years, suggesting another manifestation of desire for immediate gratification.

“Those who decline £70 in three months in favour of £45 in three days are essentially turning down an interest rate that’s hundreds of times what they’d get on the high street.

“This may begin to explain why some people are reluctant or unable to save money.

“Simple techniques can help reduce impulsivity, like imagining how you’d feel about your decision in a year’s time or trying to avoid making decisions in the heat of the moment.”

Originally posted 2009-09-14 09:15:12.