This Cognitive Bias Explains Why You Keep Putting Off Saving Money

Tony Marshall / Stringer / Getty ImagesWhy is it so hard to save for retirement?

If you really don't have a surplus cent, that's one thing. But many of us do have money to spare, so our avoidance of this major financial tenant must be attributed to something else.

For instance, the cognitive bias of "time discounting."

In non-psych speak, that's simply the preference for immediate over future rewards - from choosing to eat a cupcake now over fitting in your jeans later to spending $500 on a new TV instead of saving that cash for future use.

When Olin Business School researchers Gubler and Pierce found that workers who contributed to their companies' 401(k) plans tended to be the same ones who proactively improved their health, they suspected that time discounting might play a role. Perhaps the same employees who were better able to combat the discounting in regards to their financial future could do the same for their long-term health.

In another paper, "Time Discounting and Time Preference: A Critical Review," Shane Frederick, George Loewenstein, and Ted O'Donoghue point out that time discounting may be common among people who "find it painful to delay gratification" - even more so when the thing they want most is right there in front of them. Anyone who has overturned their budget for a suite of Apple products will identify with that.

The tricky thing about time discounting is there isn't really a way to keep yourself from doing it. Scary stats, like the fact that some experts predict a retiree will need $2 million in savings, and persuasive charts, like the ones that illustrate the power of compound interest, only go so far.

Luckily, you don't need urgency to be an effective saver. Setting up a simple automatic contribution from your paycheck to your 401(k) or IRA - or both - will take the hard part out of your hands. You can keep buying whatever tempting gadgets cross your path while your money goes on working behind the scenes, preparing for whatever your future self needs.