That loyalty coffee card you carry in your wallet? You may have noticed you’re more likely to buy your friend a coffee or go a few minutes out of your way when you’re just a stamp or two away from a free one. In fact, studies have shown that we’re more likely to keep and complete a 10-stamp card if it has the first two stamps filled than an eight-stamp card that starts blank. It’s the same number of coffees, but it creates an illusion of progress. Psychologists call this the Goal Gradient Effect: seeing that we’re close to completing a goal is fiercely motivating. It helps explain why dieters fall off the wagon when their goals seem insurmountable, why typing just a title and table of contents makes writing a report feel truly underway, and why saving for something so huge and distant as retirement feels truly hard to grasp.
Use this knowledge: Got a daunting task ahead of you? Try splitting it into a series of smaller goals. If you’re saving for something large and abstract, like an emergency fund, start by setting a more achievable milestone. Aim to save $1,000 by the end of the year. You can set a new target once you’re there.