Becoming friends with your future self

I fight splurges less often than I used to, but the urge still pops up occasionally. Sometimes, it's okay to splurge; but mostly, I find myself wanting to resist temptation. There are a few questions I ask when I'm mulling over a purchase:

  • Do I have money saved for this?
  • Do I feel like I'm stealing money from a financial goal?
  • Am I simply being impulsive? Will I regret this in an hour?

Another way I decide on my spending is by considering my future self. The first time I ever came across the phrase “future self” was in a personal finance book. In the money world, the idea of “future selves” is discussed a lot. And rightfully so — a study found that, just by picturing ourselves in the future, we save more money.

In Increasing Saving Behavior Through Age-Progressed Renderings of the Future Self, researchers tested the savings behaviors of college-age participants. They showed some subjects a digitally altered image of themselves at 70-years-old. The control group was shown a photo of their present self. Researchers found that those participants who viewed a photo of their “future self” saved twice as much money in a retirement account than the control group.

Your Future Self is Like a Stranger

It's not news that the younger we are, the more distanced we feel from our future selves. It's why most of us (including myself) wait so long to take retirement seriously. At 20, I didn't feel connected to Future Kristin. The Kristin that I am now seemed like a stranger to me back then. Even the Future Kristin of a few years from now seems a little hard to fathom.

In the paper, the researchers explain how this disconnect affects our savings habits:

“To people estranged from their future selves, saving is like a choice between spending money today or giving it to a stranger years from now. Presumably, the degree to which people feel connected with their future selves should make them realize that they are the future recipients and thus should affect their willingness to save.”

Put that way, it's kind of understandable that we have a hard time considering the future. If it feels like giving money to a stranger, it's no wonder we want to keep it for ourselves, now. It's no wonder we're tempted by the urge to spend.

Obviously, there's benefit to connecting with our future selves.

Bridging the Gap Between Present and Future

I've referenced this research before, but Saving in Cycles is a similar study that looked at how people save. In that study, researchers found that when subjects considered their present conditions rather than a future goal, they saved better. Basically, when participants thought “cyclically” (this is my financial situation now; this is how it will always be), they had a significantly higher rate of savings.

At first, I thought this finding was contradictory to the former study. But when I think about it, it's less about focusing on present vs. future and more about bridging the gap between the present and the future. Connecting that gap seems to be key to learning to be a better saver.

Getting to Know Your Future Self

But what does it mean to consider your future self? According to the study, it might be as simple as just picturing yourself in the future. Simply seeing ourselves aged might make us realize that, yes, we will be that “stranger” of the future.

Interestingly, when Merrill Edge heard about the research, they launched a “Face Retirement” app. It's basically a tool that aged consumers so they could see how they'd look in the future. The idea was to encourage customers to save more.

Marketing gimmick aside, I guess it can't hurt. Psychologist Daniel Goldstein co-authored the “Future Self” study. In a TED talk, Goldstein explains that he's working to develop similar digital tools for visualizing your future self — something he calls a “behavioral time machine.” But if you prefer traditional methods, Goldstein also mentions “commitment devices.”

“Now I'm a big fan of commitment devices actually. Tying yourself to the mast is the oldest one, but there are other ones such as locking a credit card away with a key or not bringing junk food into the house so you won't eat it or unplugging your Internet connection so you can't use your computer. I was creating commitment devices of my own long before I knew what they were. So when I was a starving post-doc at Columbia University, I was deep in a publish-or-perish phase of my career. I had to write five pages a day towards papers or I would have to give up five dollars.”

Commitment devices can be helpful tools to force you to consider your future self. Here are a few devices and traditional personal finance tenets that helped me “bridge the gap”:

  • Automate your savings: Paying yourself first. Don't give yourself the time to decide whether you should save for retirement or spend now. Instead of testing your willpower, your money will automatically be allocated to your future self.
  • Set small milestones: The Simple Dollar‘s Trent Hamm wrote about this, and his advice stuck with me: “When you break your goal down into small pieces with milestones, the day-to-day actions you need to take to achieve those goals becomes clearer. It's easier to figure out how to save $175 this week than how to save $50,000 over the next five years.”
  • Live below your means: Don't spend money you don't have. Mull over purchases and learn to avoid overspending.

These bullet points aren't always easy, but I think remembering that your future is part of the present can keep you on track. Overall, simply realizing there is a gap between your present and future self is a big step in the right direction. Especially if you're young or new to personal finance and have just started creating your financial goals, connecting with your future self is important.

Even if you already are on the right track, I think there's still benefit to connecting with your future self. I practice the above habits consistently, but I still like to consider Future Kristin outside of those “commitment devices.” As I mentioned, doing so helps me make better spending decisions. It helps me decide if I want to increase those automatic payments. It keeps me more grounded in reality too, knowing that who I am today and who I'll become is the same person. For me, this is key to working toward my goals, money-related or otherwise.

More about...Psychology, Budgeting, Retirement

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M
M
6 years ago

I tend to be a “future planner” so this exercise comes naturally. My approach is probably fear-based, but I experienced the death of a parent in my teen years and learned ear!y on that life is short. In my first professional job out of grad school, I saved prudently and contributed as much as I could to a pension. Now 25 years later, I know my basics are covered for retirement. My future self (now) is just tickled by that young woman’s actions. Her choice in a boyfriend at the time? Well, not so much 🙂

slccom
slccom
6 years ago
Reply to  M

What a difficult loss! But you learned from it, and I’m sure your parent is very, very proud of you.

NicoleAndmaggie
NicoleAndmaggie
6 years ago

Something that works pretty well is telling your future self that it can have the thing if it still wants it (maybe for a birthday or if you reach a goal). Often, it no longer wants it, or you end up getting benefit from anticipation.

Kristin Wong
Kristin Wong
6 years ago

I definitely like the idea of having to reach a goal to get something you want now. Seems like a great way to connect the future to the present.

Alyssa
Alyssa
6 years ago

Kristin, i just wanted to say how much i enjoy your writing. Your contributions are always very well written, practical and interesting. Thank you!

Kristin Wong
Kristin Wong
6 years ago
Reply to  Alyssa

Well, thanks! I’m blushing. This was an encouraging comment to read 🙂

LMoot
LMoot
6 years ago

People in my life make fun of me for my long-termed thinking. I agree I get carried away trying to anticipate and plan every piece of my life like it’s a chess game, but it’s genuinely fun for me. My purposeful way of living has kept me on track and in tune with my true self, and helped me accomplish everything I’ve wanted so far. Why would I change that up? I love imagining myself in x amount of years and do it frequently as a motivational exercise. I still live in the moment, I’m just capable of being happy… Read more »

Kristin Wong
Kristin Wong
6 years ago
Reply to  LMoot

Thanks Lmoot! As you know, I always love and look forward to your comments. It sounds like you’ve found a great balance of living in the present and prepping for the future. What a great quality to have!

Stefanie @ The Broke and Beautiful Life
Stefanie @ The Broke and Beautiful Life
6 years ago

I find thinking about accumulating debt as taking money from your future self is an incredibly powerful deterrent.

Tina
Tina
6 years ago

I like this article! I often use my “know myself tools”. I like to buy clothes and after seeing them fall out of my closet onto the floor because there is so much, I made a vow not to buy any clothes this year unless I need to. But I am still tempted when walking though my favorite stores so I came up with a plan for myself. Every time I see something I want, I place it in the cart and continue to shop for the necessities. By the time I get to the end of the necessities, I… Read more »

Lmoot
Lmoot
6 years ago
Reply to  Tina

Awesome trick. I do that with online shopping. I click on everything I have the whim to buy and tally up the grand total at checkout. My highest cart amount $3000. Yipes! It gives me a reality check at what I am capable of if I’m not careful and encourages me to continue practicing self control. It also puts the things that I really want into perspective until I can whittle it down to a more reasonable amount.

Alyssa
Alyssa
6 years ago
Reply to  Tina

I do almost the same thing… when shopping i always try to put at least one item back at the end of the shopping trip. Usually, there are at least one or two things in my cart that i absolutely do not need. It makes me feel empowered and more in control of my spending.

Ely
Ely
6 years ago

I have no trouble visualizing my future self: I just look at my 91-year-old grandmother. I will probably live at least as long as she does, and I don’t have a fraction of her resources. This reminds me to keep thinking ahead and planning for a long future. I want to live like her when I’m 91: traveling, socializing, living comfortably. I don’t want to be poor and struggling.

Brian@ Debt Discipline
[email protected] Debt Discipline
6 years ago

Thinking about my future self and being debt free is my main motivation to continue to pay $2k per month towards debt repayment.

Money Saving
Money Saving
6 years ago

I think envisioning your future self also helps work to break bad habits. Most folks develop a certain sense of “me” and will take actions consistent with that sense of who they are.

If you are always the one with the flashiest new stuff, it just becomes who you are and you feel a need to perpetuate that. If you can envision your future self as different than your current self, you can trick your brain into avoiding those bad habits.

Great article Kristin!

Teinegurl
Teinegurl
6 years ago

I felt this way to but what if your “present self” needs money now? I wonder if you use your retirement or cash out once you leave a job instead of rolling over 401 (k) how do break those bad habits? You think “i’ll use the money now and save once i get a job, i’ll save again” and then face a long umemployment with no choice. I think an emergency fund would help but the choices was made after the fact. That might be a good article or something i would like to see. I also think your background… Read more »

Crystal
Crystal
6 years ago

I do this a lot! I always ask myself if my 75 year old self would slap me upside the head for a certain purchase or expense. It works! Hopefully I won’t have many financial regrets by my golden years this way…

Alea
Alea
6 years ago

Great article. When I talk to my lady friends at work about what a super saver I am, they look at me like I have a mental defect. “What’s the point of you saving so much and then you die before you spend the money?” “Well, if I am dead, my 401(K) is the last thing on my mind. Hopefully heaven will be money and worry free. But I do know one thing, when I am old, alone and penniless I would rather be dead than depend on the kindness of strangers”. And what exactly am I giving up that… Read more »

Karen
Karen
6 years ago
Reply to  Alea

I love this response!!! What a great picture you paint of your future self!

M
M
6 years ago

Alea, your imagined first of retirement sounds AWESOME! What a gift to yourself!

Alea
Alea
6 years ago
Reply to  M

Thank you, and with my good genes, I will have adventures late into my 90’s.

Tara
Tara
6 years ago

Great post, Kristin! Love your wrting. I am a terrible impulse spender, so I have to first calculate how much I need to save for retirement and emergency fund, and I skim that off the top right away through my 401K and employee stock purchase deductions. Then I calculate how much I need to pay my necessary expenses per year, and after that I figure out how much will be left over to spend freely and give myself a weekly allowance. That money can be spent on anything I want and totally impulsively. So I end up saving AND indulging… Read more »

Jasmine Assan
Jasmine Assan
6 years ago

I have always seen myself as a high achiever.I make goals and make it a point to keep them so, I do not often have problems with budgeting as much as taking it to the extreme;to the point of suffocation. I have been trying to balance out my spending. Mostly I create a budget, either for the week or the month, and spend accordingly so that I can save the rest. I gave this advice to a friend who was finding it difficult to save.I calculated her average money spent in a week and divided it in half.After realizing she… Read more »

Stephen in Florida
Stephen in Florida
6 years ago

You know, as much as it may have seemed like a pain when I was younger, this is the reason I appreciate my dad being willing to talk retirement funding with me when I was just entering college. At the time, I thought it was absorb that he kept pushing upon me the concept that I should put away as much as I can each year into an IRA. I know my future self will be quite thankful for these actions.

Christian
Christian
4 years ago

I find it harder to deal with your past and present self than the future one. Yeah I see how I want to be in the future but after being taught one type of mindset my whole life and now changing to saving can be hard.

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