Present Bias: Why Tomorrow Is Always the Perfect Day to Start Saving

Three years of 'next month' — a story you'll recognise

A situation you recognise

Someone works as a marketing specialist at an Amsterdam agency. They earn €2,800 net — a solid salary for their age and city. They rent a flat in De Pijp with a flatmate, have subscriptions they've lost count of, and love a good flat white on the way to the office. Since they started working, three years ago, they tell themselves the same thing every month: "Starting next month, I'm going to save."

Last October, this person had a birthday. Their twenty-eighth. And as tends to happen with round numbers, they started doing the maths. Not on the cake — on money. Three years of work, 36 pay cheques, over €100,000 earned before tax. How much was left? They logged into the savings account they'd opened "just in case" a year into the job. Balance: €600.

That evening they did something they had never done before — sat down with a piece of paper and calculated what they should have if they'd actually set aside 10% of their salary each month, the way they kept planning to. The result was uncomfortable. At that rate they should have around €10,080 in savings by now — plus interest from a savings account, putting them closer to €10,500. Instead, they had €600 and the feeling that three years had slipped through their fingers.

But this person isn't reckless. They don't buy designer bags or fly to the Maldives. The money "just disappears" — in flat whites, in Deliveroo at 10pm, in spontaneous weekend trips, in five subscriptions that together cost €120 a month. Each individual spend feels reasonable. In total — three years of savings gone.

Where is the gap between what you plan and what you actually do? And why does "next month" never arrive — even though each month you genuinely believe this time will be different? The answer has a scientific name — and most of us recognise ourselves in it the moment we hear it.

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I lived this pattern for three years

For three years I told myself: "I'll start saving seriously after this project." The project ended. Another started. Income grew — proportionally to spending. It's not about ambition or willpower. It's neurobiology. I recognised this pattern in myself before I read a single study — and that's why Martia is designed to automate decisions before your brain can delay them.

Why it's hard — your brain is designed to prefer now

If you read that scenario and thought "that sounds like me" — you're not alone. And more importantly: this is not a character flaw, a lack of willpower, or laziness. Postponing financial decisions is a behaviour so universal and so deeply wired into human biology that behavioural economists have given it its own name and built an entire branch of science around explaining it.

What is present bias?

Present bias is the tendency to overweight immediate rewards at the expense of future ones — even when the future rewards are objectively much larger. Behavioural economist Richard Thaler described it as one of the core mechanisms explaining why people consistently save less than they say they want to. It's not about lacking knowledge — people know they should save. It's that the brain treats future benefits as distant and abstract, less real than today's coffee or tonight's series.

It helps to understand where this tendency comes from in the first place. For most of human history, we lived in environments where tomorrow was genuinely uncertain. If you found food today — you ate today, because you had no idea whether anything would be available tomorrow. Evolution rewarded those who preferred immediate rewards over hypothetical future ones. For hundreds of thousands of years, that strategy worked brilliantly.

The problem is that our brains are still equipped with that same reward system — and now we're trying to use it to make decisions about pension pots, ISAs, and emergency funds. Our ancestors didn't need to think about retirement savings. We do — but our brains don't know that.

This isn't an excuse. It's a starting point. Because to overcome present bias, you first need to know what you're dealing with. You cannot win a battle against evolution through willpower alone — but you can cleverly work around it.

Present bias across Europe — the numbers

38%

of Europeans report having no financial cushion to cover unexpected expenses (ECB Consumer Expectations Survey, 2023)

70%

of Europeans say they intend to save more — but haven't meaningfully changed their saving behaviour in the past 12 months (ING International Survey on Savings, 2024)

13.7%

is the EU's headline household saving rate (Eurostat, 2023), but this figure is pulled upward by top earners — millions of European households save nothing at all

€10,080

what gets lost over three years by not setting aside 10% of a €2,800 monthly income

Sources: ECB Consumer Expectations Survey 2023, ING International Survey on Savings 2024, Eurostat — Household saving rate 2023

How present bias actually works — the mechanism step by step

To overcome present bias effectively, it helps to understand what is actually happening in the brain when we face the choice between "spend now" and "save for later". This isn't abstract philosophy — it's concrete neuroscience that we can turn to our advantage.

Hyperbolic discounting — why the future feels like a foreign country

Economists long assumed that people discount future rewards linearly — that €100 in a year is worth less than €100 today by a fixed, predictable percentage. David Laibson of Harvard showed in his landmark 1997 paper in the Quarterly Journal of Economics that reality looks very different. The human brain discounts the future hyperbolically — meaning the value gap between "now" and "in a moment" is enormous, but between "in a year" and "in a year and a day" — almost nothing.

A practical example: imagine someone offers you a choice between €50 today or €55 in a week. Most people take the €50 now — even though a 10% weekly return is a phenomenal rate of return. But shift the same choice forward: €50 in a year versus €55 in a year and a week. Suddenly most people choose patience and wait for the €55. Same week's wait, same reward — but a radically different decision. That is hyperbolic discounting in action.

In practice, this means that savings in 30 years' time (retirement, financial freedom) are so distant that your brain barely registers them as real. A €4.50 flat white is absolutely real and absolutely now. The brain isn't stupid — it simply cannot translate distant futures into present-day emotions.

Dopamine and immediacy — why small pleasures beat big goals

The brain's reward system runs on dopamine — a neurotransmitter that signals "this is good, do more of it". The critical property: dopamine responds far more strongly to immediate rewards than deferred ones. When you buy something now, your brain gets a clear dopamine signal. When you transfer money to a savings account — the reward is abstract, deferred, hard to feel emotionally.

This explains a paradox many people know well: you genuinely want to save (long-term goal, prefrontal cortex) and simultaneously genuinely want to buy those shoes / order food / add to the basket (immediate reward, limbic system). These two "wants" aren't contradictory. They're simply produced by different parts of the brain — and the part producing present-moment pleasure is far better at overriding resistance.

The "fresh start" effect — why next month always looks better

There's one more mechanism that gives "next month" its magical power. Psychologists call it the false hope syndrome. When we imagine our future selves, we automatically project a better version: more disciplined, less impulsive, with greater willpower. Your future self will definitely save, because your future self is wiser than your present self.

The problem is that when next month arrives — you are still the same present-day you. With the same impulses, the same subscriptions, and the same coffee on the way to work. And next month looks better again. So it goes, month after month, for three years.

Let's return to that birthday evening for a moment. Counting that €600, something important became clear: three years of not saving didn't mean being a bad person or a lazy one. It meant being exactly the kind of person everyone is — subject to psychological mechanisms that operate without your knowledge or consent. That recognition is the first step. The next one matters more: what to do about it.

How much is your 'tomorrow' costing you every month?

Martia automatically pulls transactions from all your bank accounts and shows you in one place where your money is actually going. When you can see the numbers, you make different decisions — research confirms this. No manual entry, no spreadsheets required.

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The myth that blocks saving for millions of Europeans

When I talk to people who aren't saving, one thought comes up more than almost any other. It sounds reasonable. It sounds like a plan. And it is fundamentally wrong.

The myth vs. reality

The myth: "I'll start saving when I earn more. Right now there's simply nothing left over — once I get a pay rise / change jobs / pay off this one debt, then there'll be room to save."

Reality: Behavioural economists call this phenomenon lifestyle inflation — the automatic rise in spending proportional to income growth. Research by Richard Easterlin and later work by Betsey Stevenson and Justin Wolfers shows that above a certain income threshold, additional earnings don't translate into higher savings, because spending rises alongside them. Someone earning €2,000/month says "when I earn €3,000, I'll start saving." Someone earning €3,000 says "when I earn €4,500..."

Where does this myth come from? It's a combination of present bias and what psychologists call projection bias — the tendency to assume that our future self will have different preferences from our current one. We imagine that with a higher income we'll naturally become more frugal. In practice, our spending adjusts to available resources almost automatically: a bigger flat in a nicer neighbourhood, better restaurants, a newer car. Each of these choices seems justified at the time. Together, they consume the entire pay rise.

You probably earn more than you did three years ago. Your flat is more expensive than the one you first rented. Your coffee is more expensive than the office machine. Your subscriptions are more expensive than having none. You aren't reckless — you're average. And that is precisely the problem: "average" financial behaviour means your spending will catch up with your income regardless of how much you earn.

The truth, confirmed by both research and by people who have actually built savings: there is no perfect moment to start saving. There is only now. The amount doesn't matter — the moment does. €50 started today is worth more than €500 planned for next year.

The Micro-Commitment Method — how to outsmart your own brain

If you've read this far, you already know that willpower won't win against present bias — and you know why. Now for the most important part: what to use instead. The answer is pre-commitment systems — mechanisms where you make the decision to save once, and then it runs automatically, before your brain has time to object.

The Micro-Commitment Method is built on the discoveries of behavioural economists — principally Richard Thaler and Shlomo Benartzi — who designed the "Save More Tomorrow" (SMarT) savings programme. Their core principle is simple: don't ask people to save more today (that activates present bias). Ask them to commit to saving in the future — and to automatically increase the amount with each pay rise. The results were spectacular: in a study published in the Journal of Political Economy in 2004, programme participants increased their saving rate from 3.5% to 13.6% over four years.

Step 1: Start with a laughably small amount — today, not tomorrow

Transfer money now — literally now, before you finish reading this article — to a separate savings account. Not €500. Not "what you should be saving". Ten euros. Or twenty. Whatever feels absurdly small.

Why so small? Because the goal of this step is not financial — it's psychological. The point is for your brain to experience that saving is possible now, not just in some abstract future. The moment that transfer goes through, you have savings. Actually. Really. Not a plan for savings — savings. That is a fundamental difference for the brain's reward system.

James Clear in Atomic Habits describes this mechanism as an "identity vote" — every small action aligned with your goal (saving) gives you evidence that you are someone who saves. And identity is a stronger motivator than a target.

Step 2: Set up a standing order for the day after your pay arrives

Behavioural economists call it "pay yourself first." The logic is about removing the decision from the equation entirely. If you have to decide whether to transfer money to savings, your brain will sabotage that decision through present bias for the rest of your life. If the transfer happens automatically — there is no decision. You can only spend what's left.

Set up a standing order: one day after your pay arrives, a fixed amount, straight to a savings account. Start with an amount you genuinely won't notice — €50, €80, €100. The point is for the automation to run painlessly. In three months you can increase it.

Key detail: the savings account should be at a different bank or fintech than your main current account — a Revolut savings vault, an N26 Spaces pot, a Monzo savings pot, or a separate traditional savings account. Research shows that the simple physical distance (having to log in elsewhere to access the savings) is enough to significantly reduce impulsive dipping into your reserve.

Step 3: Commit to raising your savings with every pay rise

This is the heart of Thaler and Benartzi's method. When you get a pay rise, your spending hasn't adjusted yet — this is the only moment when you have "new" money that isn't already allocated to anything. Commit now (before you have the pay rise) that you'll put at least half of every future pay rise into an increase to your automatic transfer.

If you earn €2,800 net and get a €300 pay rise, your lifestyle can expand by €150 — but your savings grow by another €150 a month. This requires no willpower at the moment of the pay rise — because the decision was made in advance. And the compounding effect after several years is transformative.

The turning point

That same evening, €50 went to a Revolut savings vault — separate from the main ING current account. The next day, a standing order was set up for €120 a month, on the 11th of each month (the day after payday). No complex budget — just that one automatic transfer. Three months later the amount increased to €200, because — "I genuinely didn't notice it was gone." A year later the balance stood at €2,800 in savings. Not €10,000 — but this is not the end of the story, just its beginning. And for the first time, there was proof that saving is possible right now.

Tools that remove the obstacles — how to make saving happen automatically

Understanding present bias is the first step. A standing order is the second. The third — and often the deciding one — is seeing your complete financial picture in one place. Because one of the reasons it's so easy not to save is that you can't see the real-time cost of each decision.

Why simply tracking spending changes behaviour

There is a well-documented phenomenon in behavioural psychology: the simple act of observing a behaviour changes it. In a financial context: people who actively track spending — even just recording without judging — statistically spend 10–15% less. Not because they're restricting themselves through willpower, but because information changes perception. When you see that you spent €280 on restaurants and food delivery this month, the next decision to order in is no longer an anonymous transaction — it's a conscious response to knowledge you already have.

This is precisely what Martia removes from the equation. It connects to leading European banks and fintechs — ING, BNP Paribas, HSBC, N26, Revolut, Monzo, Bunq, Wise and many more — through secure Open Banking (PSD2) connections. All your transactions from all accounts arrive in one place and are automatically categorised. At a glance you can see: how much you spent on eating out, how much on subscriptions, how much on online shopping. No manual entry, no spreadsheets — just the data.

For anyone with accounts at more than one bank or fintech, this removes a specific barrier: the need to log in to three separate apps to see the full picture. The brain happily uses that friction as an excuse not to look. When there's one view, the excuse disappears.

Pre-commitment as a systemic tool

Beyond automatic expense tracking, it's worth knowing the pre-commitment tools available to savers across Europe. Tax-advantaged savings and pension accounts — ISAs in the UK, Livret A in France, Sparbuch in Germany, individual pension pots, or the newer Pan-European Personal Pension Product (PEPP) — work as powerful pre-commitment devices. Their strength lies partly in friction: early withdrawal often carries tax consequences or delays, which psychologically makes it much harder to impulsively reach for what you've set aside. As of February 2026, annual ISA allowances in the UK stand at £20,000 — a meaningful opportunity to shelter savings from tax while making them harder to spend on impulse.

For those who want to go deeper into the practical steps of building a saving habit from scratch, we have a detailed guide with concrete methods and tools:

Want more practical advice?

Now that you understand why you keep postponing saving, and want to learn how to build a real saving system, read our practical guide: How to save money every month — 15 proven methods

Start with €50. See where it goes.

Martia connects all your bank accounts in one place and categorises your spending automatically. When you can see where your money is actually going, it becomes easier to commit to that automatic standing order. Not tomorrow — now.

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