Make Contracts Work for You

Human beings are lazy. We often default to the path of least resistance. We rely on motivation to do things. We can use the carrot (the reward) and the stick (punishment) to direct our behaviour. The idea is to use both of these mechanisms in tandem to maximize the desired outcome.

I was pretty good at giving myself carrots. Often, the carrots are embedded in completing the task. For example, you get a natural high after a workout or you get a feeling of satisfaction after cleaning your house. At times, I would pair a daunting task such as studying for an exam with some socializing after to reward myself.

I wasn’t so good with the stick. I rarely set up a punishment for not completing a task. The only punishment present would be the intrinsic pain that comes with not doing the thing. If we look at the examples above, not working out leaves you with physical pain and less energy, not cleaning leaves you with a dirty and messy house, and not studying is correlated with lower grades. The problem with these types of punishments is that they are not immediate. It takes a long for our brains and emotions to associate a distant abstract punishment to a specific behaviour in the past.

Furthermore, Hal Hershfield‘s research suggests that we think of our future self as a stranger. This is evident in the short term when your last night self stayed up to watch the last three episodes of a show and then your next morning self is angry at your last night self. It also happens in the long term with diseases that were caused by lifestyle conditions or when it comes to saving money for our retirements. My retired self won’t too happy if my present self did not sacrifice 10% of their income. Again, the punishment is too distant and abstract.

Back in Teacher’s College, my roommates and I wanted to work out three times per week. We agreed to pay each other a dollar for every missed workout at the end of the week. We quickly realized that this small punishment was enough to drastically improve our success rate. The dollar was only a symbol for the punishment, however. It was the social accountability and shame associated with having to tell your friends that you fell short. Most people benefit from this accountability without formalizing it by training with a personal trainer or by attending fitness classes.

It wasn’t until I watched Mark Adam’s Ted Talk that I realized that the idea of contracts is much broader and important than I had imagined. This approach is not for everyone but many people could benefit from it. I think contracts are especially useful for people with unrealistic goals. It is usually the same type of person who has grand projects but never follows through. It will take a few failed contracts for them to set lower expectations. From experience, smaller and simpler contracts tend to give better results in the long term. Grand commitments are great to get something done before a deadline. Contracts also take away the choice of doing the thing. It is sitting on the fence which hurts; not necessarily being on either side. We are often happier without this choice.

Discipline equals freedom.

Jocko Willink

The Duddhawork Lab

After some build-up and experimentation, I decided to create a group chat with my close friends where we leverage contracts to get things done. The other members of the group are there to hold each other accountable. For 2021, I decided to create a monthly contract instead of creating a bigger contract for my new year goals (see article). This way I can experiment (hence the name DDW Lab) with habits to see which ones are worth keeping in the toolkit. Below are the rules we abide by.

• I will write a clear commitment statement in the following format and post it in the group.
  • I _(name)_______ commit to ______(routine and how often)_____ from ___(starting date)___ to ____(end date)___.
• I will post in the group once per day a picture or message related to the committed behaviour.
• I will pay each member of the group (up to 20 members) 1$ for every failed time period.
  • If I committed to reading 10 minutes per day and I missed one day, I will have to pay everyone 1$ for that day.
  • If I committed to doing 2 workouts per week and I only got one this week, I will pay everyone 1$ for that week.
• I will pay everyone 5$ if I want to break my commitment.
• I need to have an active commitment to receive payments.
• The honour system will be used in this group.
  • Three-strike system for misconduct.
• Failure to pay other members will results in permanent exclusion of that member from the group.
• Payments can be made once per month if fees apply to e-transfers.

I encourage you to create such a group with your friends or family. It is crucial that all members volunteer to join. If this is not an option for you, many websites such as stickk use the same principles. Keep in mind that the whole point of creating contracts is to maximize well-being. Sometimes it is tricky to figure out if the short-term dip in well-being (a sacrifice) is worth the long-term gains (see Daylio article). There is always an opportunity cost associated with every habit you pick up. Let’s take a semi-extreme case and consider that you’ve committed to meditating 3 hours per day because you think that it will make you woke. You will almost certainly benefit from doing so but you will also struggle. The opportunity cost creeps in because you may be able to get close to the same levels of “wokeness” from meditating less. You could save some pain. The extra time could be spent doing other things that increase your well-being.

Contracts are a great way to treat your future self as you instead of as a stranger. Be careful not to take it too far so that your present self builds resentment towards your future self. It is generally wiser to borrow happiness from the now and let the benefits compound than it is to borrow happiness from the future. The following three words could have saved you from reading this article.