Automatic payroll deductions help people to fight their time inconsistency problem with regards to saving.

Question

Quizplus · Accepted Answer

Automatic payroll deductions directly transfer a portion of an individual's earnings to a savings account or investment plan before they receive their paycheck, making it easier to save consistently and reducing the temptation to spend the money instead. This helps in combating the time inconsistency problem, where people's preferences for saving versus spending can change over time, often leading to less saving than intended.

Automatic Payroll Deductions Help People to Fight Their Time Inconsistency