We disproportionately value immediate rewards.
We know contributing to our pension fund pays off in the long run, but we'd rather spend today. Present bias, also called hyperbolic discounting, describes how we devalue future rewards much faster than would be rational, simply because they're further away in time.
Given the choice between $100 today or $110 in a month, many people choose the $100 today. But when the same choice is framed in the future (receiving $100 in a year or $110 in thirteen months), most people prefer to wait the extra month for the additional $10. The time gap is identical in both cases, but when the immediate reward is at stake, the present weighs far more than it rationally should.
The value we assign to a future reward doesn't decline at a constant rate over time. It drops much faster in the short term. That gives "now" an unfair advantage over any "later," no matter how much better the future reward is.
Source: Laibson, D. (1997). Golden Eggs and Hyperbolic Discounting. Quarterly Journal of Economics, 112(2), 443-478.
Savings programs, preventive health, and financial education are structurally at a disadvantage against immediate consumption. Bringing the future benefit closer to the present (early partial rewards, frequent reminders) tends to work better than simply explaining the long-term benefit.
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