How to Reward Yourself and Pay Off Debt With Temptation Bundling

temptation bundling

Early in my career, I decided to try my hand at becoming a novelist. However, I was already working a full-time job, which left little time for writing.

What’s more, I lived in a small apartment with four other people, so there wasn’t a lot of quiet time at home. And, I was also on a tight budget. Even though I always spared some change for my favorite coffee shop, I always felt guilty for going there.

So I had two problems: not enough time to work on a novel and financial guilt over my favorite expenditure. That’s when I decided to combine my problems to create a solution.

I made a deal with myself that I could buy my favorite coffee every day if and only if I woke up early enough to sit at the coffee shop and write for 30 minutes before work.

This was the perfect solution because it motivated me to do the hard thing (wake up extra early) and rewarded me with my favorite thing (going to the coffee shop).

Did it work? Well, a few years and two not-so-great but finished novels later, I’d say it did! Here’s the really fun part: you can use this same kind of thinking to pay off your debts. Here’s how.

What is temptation bundling?

When I first tried this strategy years ago, I had no idea that there was an official term. Turns out, what I was doing was something called “temptation coupling” or “temptation bundling.”

Originally coined by Wharton professor Katherine Milkman, James Clear sums it up nicely as the “idea that you can make it easier to perform a behavior that is good for you in the long-run by combining it with a behavior that feels good for you in the short-run.”

In other words, “you are essentially bundling behaviors you are tempted to do with behaviors that you should do, but often neglect.”

In my case, the behavior I was tempted to do was go to my favorite coffee shop. and the behavior I often neglected was writing my novel. By putting these together, I was able to accomplish my goal of writing novels.

Milkman originally discovered the effectiveness of this strategy with an experiment on people going to the gym. She found that participants in the study who were given an iPod with a highly addictive novel every time they worked out actually worked out one extra time per week for seven weeks straight.

This temptation bundling was so effective that she added another element: she asked them to pay for access to that iPod each time.

And you know what? It worked! Not only did adding something they wanted to do (listen to the novel) make them do something they might have otherwise neglected (go to the gym), they even paid for it.

If you want to hear how this worked from Milkman’s words, you can watch her video on the experiment.

How to use temptation bundling to pay off debt

The concept of temptation bundling may have been researched in the gym, but it applies to anything that requires self-control or willpower. And what could require those traits more than debt payoff?

If you’re facing a long repayment journey ahead, this might be just the thing you need to keep you from falling into debt fatigue. Here are three steps you can take to take advantage of this strategy.

1. Identify your reward

The first thing you should do is identify your reward.

What in life do you love to do that you simply can’t find the time for? Is it reading or listening to a great book? Maybe it’s going out to one of your favorite bars or restaurants. Or even setting yourself up with a glass of wine and a long bubble bath.

Whatever it is, dig deep. Find the thing that takes you to your happy place when the pressures of life feel too much to bear.

The only rule is to make sure the reward isn’t something that costs so much it renders your debt payoff progress fruitless. And don’t fall for something just because of FOMO. Choose something that brings you joy, something that has always brought you joy.

2. Create a system that combines payoff with your reward

Have your reward? Great! Now simply combine it with your debt payoff.

Every time you make a payment on your debt, indulge in the reward. Give yourself the instant gratification you wouldn’t otherwise have in a long payoff journey.

Have more than one reward or a way to upgrade the reward you chose? If so, double down if you make an extra payment. Say you applied your tax refund to debt, paid over the amount due, or sent in an extra payment just because. Celebrate going over and above with your upgraded reward.

3. Maintain your system consistently

Now all you have to do is keep on going. Maintain this system consistently, so you feel the positive effects you’ve given yourself for paying on your debt each and every month. Keep doing this to turn something that can usually feel restrictive into something empowering instead.

You’re taking care of your debt, so take care of yourself in return. Stay the course until you hit the most beautiful debt number of all: $0.

Looking for more tips to stay motivated and pay off debt faster? Check out how you can finally make this the year you pay off debt.

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1 Includes AutoPay discount. Important Disclosures for SoFi.

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  1. Terms and Conditions Apply: SOFI RESERVES THE RIGHT TO MODIFY OR DISCONTINUE PRODUCTS AND BENEFITS AT ANY TIME WITHOUT NOTICE. To qualify, a borrower must be a U.S. citizen or permanent resident in an eligible state and meet SoFi’s underwriting requirements. Not all borrowers receive the lowest rate. To qualify for the lowest rate, you must have a responsible financial history and meet other conditions. If approved, your actual rate will be within the range of rates listed above and will depend on a variety of factors, including term of loan, a responsible financial history, years of experience, income and other factors. Rates and Terms are subject to change at anytime without notice and are subject to state restrictions. SoFi refinance loans are private loans and do not have the same repayment options that the federal loan program offers such as Income Based Repayment or Income Contingent Repayment or PAYE. Licensed by the Department of Business Oversight under the California Finance Lender Law License No. 6054612. SoFi loans are originated by SoFi Lending Corp., NMLS # 1121636. (www.nmlsconsumeraccess.org)
  2. Personal Loans: Fixed rates from 5.49% APR to 14.24% APR (with AutoPay). Variable rates from 5.29% APR to 11.44% APR (with AutoPay). SoFi rate ranges are current as of December 1, 2017 and are subject to change without notice. Not all rates and amounts available in all states. See Personal Loan eligibility details. Not all applicants qualify for the lowest rate. If approved for a loan, to qualify for the lowest rate, you must have a responsible financial history and meet other conditions. Your actual rate will be within the range of rates listed above and will depend on a variety of factors, including evaluation of your credit worthiness, years of professional experience, income and other factors. Interest rates on variable rate loans are capped at 14.95%. Lowest variable rate of 5.29% APR assumes current 1-month LIBOR rate of 1.34% plus 4.20% margin minus 0.25% AutoPay discount. For the SoFi variable rate loan, the 1-month LIBOR index will adjust monthly and the loan payment will be re-amortized and may change monthly. APRs for variable rate loans may increase after origination if the LIBOR index increases. The SoFi 0.25% AutoPay interest rate reduction requires you to agree to make monthly principal and interest payments by an automatic monthly deduction from a savings or checking account. The benefit will discontinue and be lost for periods in which you do not pay by automatic deduction from a savings or checking account.

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  1. Personal Loan Rate Disclosure: Variable rate, based on the one-month London Interbank Offered Rate (“LIBOR”) published in The Wall Street Journal on the twenty-fifth day, or the next business day, of the preceding calendar month. As of August 1, 2017, the one-month LIBOR rate is 1.23%. Variable interest rates range from 6.02% – 15.97% (6.02% – 15.97% APR) and will fluctuate over the term of your loan with changes in the LIBOR rate, and will vary based on applicable terms and presence of a co-applicant. Fixed interest rates range from 5.99% – 16.24% (5.99% – 16.24% APR) based on applicable terms and presence of a co-applicant. Lowest rates shown are for eligible applicants, require a 3-year repayment term, and include our Loyalty and Automatic Payment discounts of 0.25 percentage points each, as outlined in the Loyalty Discount and Automatic Payment Discount disclosures. Subject to additional terms and conditions, and rates are subject to change at any time without notice. Such changes will only apply to applications taken after the effective date of change.
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