Sunday, July 14, 2013

How Fast Food Wrecks Your Finances

How Fast Food Wrecks Your Finances

Steer clear of Burger King on your way to the bank. Simply walking by a fast-food restaurant can mess with your financial sense, finds new research from the University of Toronto.

In the study, participants were offered the choice between choosing a cash reward the next day and a slightly bigger reward the next week. People who were asked to pick while standing near a fast-food joint were about 40 percent more likely to opt for the smaller, speedier payout than those questioned near a full-service restaurant. That sounds a little nuts, but four similar experiments all linked the presence of fast-food places to impatient, I-want-it-now financial decisions, the study shows.

Because fast food is all about instant gratification, just looking at a McDonald’s or Taco Bell seems to subtly shift your thinking toward immediate—as opposed to long-term—goals and desires, says study coauthor Sanford DeVoe, Ph.D. It’s a leap, but the growing number of fast-food restaurants may even help explain America’s plummeting personal-savings rate, which has sunk from 10 percent of disposable income to zero over the last 25 years, DeVoe says

What can you do about it? For starters, you’ll probably want to take the back way to your credit union. But here’s one smart savings tip: dumb things down. Focusing on just a single savings goal instead of multiple marks can help you sock away more dough, according to another University of Toronto study.

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