Two years ago, I started using a technique I developed called paying Regret Fees to help my personal growth and self development. Regret fees are fees you pay when you feel regret, usually because you failed to do something you should’ve done, which you definitely could’ve done. It has helped me keep on track on my goals and my oughts, helping me overcome my present bias to make sure future me will be better off than present me.

For example, let’s say you’re on a diet where you resolve to eat healthily during the week and you eat a doughnut on Thursday because you just can’t wait for the weekend. You might enjoy it while eating it, but immediately afterward you regret eating it, this is your cue that you should pay a regret fee. You take out your phone and Venmo your friend some money as a regret fee. Or perhaps you’re a student, and you were going to work on your project today. However you spent the day watching cat videos on YouTube and liking funny animal memes on Instagram. Now it’s bedtime. Crap. You wasted your day being unproductive. You think to yourself: I should’ve at least done something today. Boom, there’s your regret. You pay your friend a regret fee.

So a regret fee is just money you pay when you feel regret for doing or not doing something. It’s that simple.

“Wait, why do I want to pay money?” you ask. Well, while failing a goal is bad, it’s often easily forgotten thanks to selective, or just bad memory. Paying money can make it more tangible, highlighting their importance. The threat of losing money motivates people by activating our innate loss aversion, a tendency to really hate losing things. In this case we’re losing money.

Regret fees are especially helpful for prevention-focused people like myself. Prevention focus is a focus on avoiding failure, also known as loss aversion. It is one of the two major ways of motivation in the book Focus: Use Different Ways of Seeing the World for Success and Influence by Halvorson and Higgins (the other one is promotion-focus, the focus on gains rather than losses). Regret fees are even more beneficial to prevention-focused people, because it forces us to seek to avoid losing money on top of failing our goals already. We want to avoid salt being rubbed in our wounds.

In addition, for those who track their expenses like I do, I can look back in my app and see how often I fail to achieve my goals and monitor my progress. Tracking helps you improve self monitor and ultimately improve.

“Okay, paying money makes sense, Adrian” you ask, “but why must I regret? Can’t I pay money for all my failed goals?” Certainly you can. Many people do! But I wanted to specify regret as a trigger  because it indicates you believe this was something you could’ve and should’ve done. More importantly, feeling regret indicates that this task meant something to you. For example, if your resolution was to work out every Wednesday, but this Wednesday when you arrive at the gym, you find out it’s closed, will you regret not getting your workout in? No, because there’s nothing you could do to achieve that goal. The gym was closed. In contrast, if you had the whole day to go to the gym, the gym was empty so no one could judge your form or flab, but you still didn’t go, you’d probably feel regret because you could’ve, you should’ve, but didn’t.

Anatomy of a regret fee:

Let’s learn how to structure a good regret fee system for your goals.

1. Choose a task that means something to you. If you don’t care about it, you won’t regret not doing it. Typically, these should be structured like a S.M.A.R.T goal.
2. Choose a manageable amount for your regret fee. A manageable amount depends on the what the task is. For me, this ranges between $0.5 to $2. If the task is harder, increase the amount because it will give you more motivation. If the task is more frequent, decrease the amount. Don’t go crazy and say you will pay $100 or something as a way to “really” motivate yourself. If you make the fee too outrageous, when it comes time to pay it, you may rationalize your failure as “not really counting” or decide that it’s not worth it after all. Keep the amount small, but not too small, and you will have no excuse to not pay it.
3. Find out how you will pay. You might pay a friend through Venmo. You might donate to a charity. In fact, donating to organisations whose missions you dislike is a oft-used strategy. What better way to prompt your prevention focus than knowing that every time you fail, your enemies get richer?

Examples of good regret fee structures

Wei wants to eat healthily during the week. If he eats something unhealthy like a pizza or doughnut, he will give his friend $2–$3. He decides this is a good amount because that’s about the same amount as an average meal tip at a restaurant.

Maria wants to get past her social anxiety. She decides to greet every shopkeeper who greets her. If she doesn’t, she will pay her friend $1. She decides $1 because she shops a lot and there are many shopkeepers so even if she misses one it’s not as big a deal.

Regret fees can be a great way to motivate you on your self development journey, especially if you are motivated more by loss aversion. It makes your failures more tangible by incorporating actual monetary losses, giving you more skin in the game. I hope this post has been helpful to you, and please leave your comments and questions below!