This post is in response to “3 Psychological Biases and Your Money,” by Joseph Reinke, CFA, CEO of FitBUX. If you are in the physical therapy profession, then you may be interested in FitPT, the FitBUX physical therapy community. You can follow @FitBUXofficial and @FitPTofficial on Twitter.

In the 1960s, Walter Mischel and his colleagues conducted one of the most famous experiments in the history of psychology. The researchers examined self-control, and they created the “marshmallow test” to study willpower in kindergartners. The test consists of offering a child the choice between one treat immediately or two treats if they wait for 15 minutes. Oh, and if the child wishes to wait in order to receive two treats, then they wait alone while a treat sits on the table. If you spend much time with small children, then you can imagine the agony involved with this task. Here is a hilarious video of some kids attempting the marshmallow test.

As a graduate student, I commiserate with these children. It’s easy to spend money, and it’s much harder to set aside money in order to have more later. Every time I receive a financial aid disbursement, I need to remind myself that some extra cash does not mean that I can afford a new phone. We students need to constantly “override” our brains in order make prudent financial decisions.

Joseph Reinke, CFA, and CEO of FitBUX recently discussed three psychological biases that are important for paying off debt. Even if you’re still in school — or perhaps especially if you’re still in school — it is crucial to attend to these biases and note how they influence your financial decisions.

1. Self-control bias

The self-control bias simply means that it’s typical for us to want to consume now instead of saving for later. When we have money in the bank from loans, it might feel like we can spend that money on whatever we want because we’ll be able to get a “good” job to pay off loans later. There’s no guarantee, however, that we will be able to afford our student loan payments after graduation. Indeed, many law students are facing the grim reality of earning “a degree they can’t use, bought with a debt they can’t repay.”

Just like the children who couldn’t wait 15 minutes in order to get a second marshmallow, we students face a challenge of self-control. We have the opportunity to accept loan disbursements for living expenses, but many of us don’t fully grasp the cost of our loans. Sure, a trip to the mall might seem trivial compared to the cost of tuition. But every time I calculate my estimated monthly loan payment, I’m a bit more motivated to get a few more wears out of a grungy T-shirt.

2. Framing bias

But what if it feels like no one else wears grungy T-shirts? It is tough to make wise financial decisions when debt is socially acceptable, but it’s our responsibility to determine what is and is not affordable for us. This is where we must decide on our priorities. For $80, would you rather (1) be a student member of the APTA for two years or (2) buy a Kindle this year and a nice pair of shoes next year? Only you can make this decision.

Social context is powerful. In the 1950s, Solomon Asch conducted experiments on conformity in college students. His experiments consisted of groups of eight students, and seven of them were confederates (i.e., actors). The task of experiment was simply to say which line on the right matched the line on the left (see Figure).

Figure. Card used for Asch conformity experiments. Participants are asked which line on the right matches the height of the line on the left. (By Fred the Oyster, GFDL,

The obvious correct answer is C. Asch found that in a control group where the actors provided the correct answer, the study participants were incorrect less than 1% of the time. When the actors all provided the same wrong answer (i.e., when all actors answered A or all answered B), participants conformed to the group’s answer 36.8% of the time. These results are fascinating, and participants reported different reasons for conforming. Many participants expressed that they knew that they were answering incorrectly, but were afraid of drawing attention by standing out.

As a student, are you willing to make tough financial decisions, even if it means standing out from the group?

3. Inertia and Default Bias

Inertia is partly responsible for the status quo bias — which is a preference for “business as usual” regardless of any evidence of its superiority. This can have harmful financial consequences when the status quo actually neglects saving for retirement, medical emergencies, or major life changes.

As students, we must be cautious when accepting our first job offer, because the quality of our benefits involves much more than salary. The tendency to accept the default offer could rob us of valuable benefits, including 401(k) matching, health insurance, continuing education reimbursement, and PTO. What is more, you may want to consider negotiating instead of accepting the offer. By the way, this excellent piece from Ben Fung (@DrBenFung) provides some tips for negotiating your salary.

Make the most of your education by overriding these biases. Don’t let these biases steal your money. 

I believe that the future of the physical therapy profession is bright, but our financial future won’t magically flourish. We have work to do. Sometimes it means being brave enough to resist conformity, and sometimes it means waiting the extra 15 minutes for that marshmallow.

For more guidance with handling your student loans, check out FitBUX and FitPT.