Forward Commitments

Recently, I had the opportunity to participate in a treasury bond auction held by the Bank of Uganda. I had decided to invest in a 15-year bond, and to make sure I followed through on that decision, I sent the necessary funds to my broker, Crested Capital, about two weeks before the auction. Along with the funds, I gave clear and irreversible instructions: buy the 15-year bond.

This simple act — committing my money ahead of time — meant that I effectively removed any temptation to spend it elsewhere. The decision was made, the money was sent, and there was no turning back. All that remained was to wait for the auction to be completed and receive the contract note confirming my purchase.

What I employed here is a well-known and effective psychological mechanism called a forward commitment. A forward commitment is a decision made today that binds you to a future action. Once you make a forward commitment, it becomes irreversible — a point of no return. It forces you to act properly according to your original intentions and protects you from making impulsive or emotionally-driven changes.

In my case, committing the money two weeks in advance removed any wiggle room. Even if unexpected temptations or expenses arose during that time, my decision was locked in. The funds were no longer available for anything else.

Forward commitments work because they instill discipline. When you create conditions where changing your mind is impossible or costly, you naturally become more disciplined. You’re less likely to second-guess yourself or be swayed by temporary emotions. They also align your actions with your long-term goals. Forward commitments act as a bridge between your present self and your future aspirations. Instead of relying on willpower in the heat of the moment, you make decisions ahead of time when you’re thinking rationally.

Another benefit is that they reduce stress and decision fatigue. Once the commitment is made, you don’t have to continually battle yourself with “should I or shouldn’t I” decisions. You simply wait for the results of the decision you have already made.

Forward commitments are not limited to investing. They can be applied to many areas of life and finances. Setting up a direct debit to your savings or investment account ensures that money is moved without you having to make a decision each month. Paying tuition fees or signing up for courses in advance locks you into the commitment to attend and complete the program. Paying upfront for a gym membership can push you to attend because you have already made a financial commitment. Depositing on a piece of land forces you to look for more money to complete the purchase. Digging the foundation forces you to start and complete building your house. Telling friends or family about your plans, like saving for a home, can create a social commitment, making you more likely to stick to your goal. Entrepreneurs often sign agreements or contracts that bind them to deliver a service or product by a certain date, ensuring they stay accountable.

Forward commitments are a powerful psychological and financial tool. They are about designing your environment to protect your goals rather than leaving them vulnerable to momentary emotions or distractions. Whether you are investing, saving, learning, or building a business, consider how you can lock in your future success today. Sometimes, the best way to stay on course is to remove the option of turning back.

Make the decision once, act in faith, and watch your goals come to life.