Money as motivation for lifestyle change
A large body of research, confirmed by painful personal experience, has established without a doubt: maintaining a healthy lifestyle is tough. Money is here to the rescue! This blog explains how you can reap the benefits of health-promoting financial incentives.
The problem of health behavior change: we are inherent procrastinators
We are inherent procrastinators, and we can’t help it. The forces of evolution have shaped us to be biased for the present. That is: we are more strongly influenced by consequences in the here and now than by the long-term consequences of our behavior (Laibson, 1997). This is why people procrastinate (studying for exams anyone?). Being present-biased makes lifestyle change difficult, because it often involves a trade-off between short-term temptations (lying on the couch), and long-term health goals (losing weight by being physically active). From an evolutionary perspective, acting on directly available rewards had important survival advantages. However, we now live in environments with an abundance of food, and no need for physical exertion to attain it. A few clicks on your smartphone are enough for a delicious meal to be dropped off at your doorstep.
Financial incentives for health behavior change
Financial incentives shape behavior in many domains of life (would you work without getting a salary?), and they are increasingly also being applied to health behavior. If there are immediate financial incentives, people (impatient by nature) no longer have to wait for the delayed rewards of healthy behavior to emerge. Health insurance companies, for instance, have introduced various financial incentives for healthy living (e.g., cinema tickets, discounts on traveling, payback on purchase of an activity tracker, see Hafner et al., 2020).
Carrots and sticks
Financial incentives come in two different forms: carrots and sticks (Adams et al., 2014). Carrots are incentives that create opportunities for financial gain. For example: you receive a cinema ticket from your health insurance company for successful behavior change. Sticks are incentives that create threats of financial loss. For example: you deposit money in a deposit contract, and can earn it back (or lose it!) contingent on behavior change. A deposit contract could be more effective than a reward, because we are loss averse (Tversky & Kahneman, 1992). Both carrots (rewards) and sticks (deposit contracts) have been shown to be effective in helping people achieve their lifestyle goals (Boonmanunt et al., 2023). Oh, and don’t worry too much about how extrinsic rewards might undermine your intrinsic motivation (i.e., desire to do something because it is inherently enjoyable). This worry makes intuitive sense, but there is little scientific evidence to support it (Promberger and Marteau, 2013).
How can you reap the benefits of financial incentives today?
1. Find out which incentive program you can join today
Health insurance company Menzis offers SamenGezond, where users achieve weekly goals and enter a lottery for a €445 voucher from Bol.com. Ditzo offers ASR Vitality, where users earn points to get a discount on cinema tickets, or get cashback on the purchase of a wearable fitness tracker (Fitbit or Apple watch). If you are not insured with one of these companies, you can try out commercial applications that reward your daily physical activity. Sweatcoin, for example, is a free app that rewards your daily steps with digital currency you can spend on products or donate to charity.
2. Deposit your money in an online deposit contract
Various online tools can help by enabling you to deposit your own money and then use this as an incentive. For example, Stickk offers you the opportunity to challenge yourself and bet money on that challenge; if you fail, it makes sure the money goes to a good cause you have designated (tapping into your loss aversion). WayBetter also gives you the option to deposit your own money, but then enters you into a group challenge where all the bets are pooled, and the money lost by the losers is paid out to the winners (as an extra reward on top of regaining their own deposit).
3. Craft your own deposit contract (with a friend)
Another option, finally, would be to craft your own deposit contract (or do so with friends). Deposit some money in a separate savings account and agree with yourself on the behavior change required to regain access to this money. If you want to quit smoking, agree with yourself that you will put the money you would normally spend on cigarettes aside in a savings account, maybe by automatic transfer. Then decide that a year from now, if you don’t smoke in the interim, the money saved can be used for a holiday trip; otherwise you lose it (or it goes to your friend). Doing this together with a friend is more fun, and has the additional benefit that your commitment is made public, making you less likely to cheat.
Oh, and be sure to start your new lifestyle at the fresh start of a new week, month, or year. People are most motivated to pursue lifestyle goals around these fresh start moments (Dai et al., 2014), and our own research indicates they may also be more successful!