We prefer immediate rewards over higher-value, delayed rewards. In a University of Chicago study, researchers found that people who felt less connected to their future preferred entering to win a gift card for $120 in a week’s time rather than one for $240 in a year’s time. Our natural preference for the future helps us get through our daily decisions (if we always waited for a “better option” on every decision, we wouldn’t get anywhere), but it also prevents us, in decisions like investing, from reaping greater rewards in the future.
We react to the same option in different ways depending on how it is presented. In a Science study, researchers gave participants two treatment options in a hypothetical situation where 600 people were sick with a deadly disease: In Treatment A, they would save 200 lives and in Treatment B, 400 people would die. Although both treatments shared the same exact outcome, 72 percent of people chose the treatment that was framed as “saving lives.”
Money definitely doesn’t grow on trees, but it might be able to buy you happiness—as long as you spend it the right way. This “right way” isn’t universal, though; it differs from person to person based on your priorities and preferences. In a recent study, researchers found that we tend to spend more money on goods that match our personalities, and that individuals whose purchases better match their personality report higher levels of satisfaction.