If you struggle to stay focused on long-term financial goals, you probably need to get to know your future self better.
Plenty of people struggle to commit to long-term financial goals, such as saving for a big purchase or growing their superannuation. It’s a common problem and one of the key reasons is that most of us find it difficult to identify with our ‘future self’.
What is ‘future self-continuity’?
‘Future self-continuity‘ refers to the ability to make a connection between who you are today and who you will be in the future. It’s difficult to do, and, in fact, it can be easy to resent ‘future you’ as someone who is having a negative impact on your life today.
Lack of self-continuity is one of the reasons it can be difficult to make voluntary contributions to superannuation. Intellectually, we know that if we put money in super today, it will grow and be very useful to us in the future. However, when we weigh it up against what we want now, something we might not use for 10, 20 or even 30 years can look like a far less appealing option!
But the reality is that setting and meeting financial goals will ultimately allow you to live for today while planning for tomorrow. In order to do that, it’s critical to visualise and connect with your future self.
Say hello to your future self
There are some things in life that we know are going to happen – as long as we are lucky enough to say fit and healthy to realise them, of course. Thinking about these as a course of events, rather than isolated ones, can help you to see and connect them to ‘present you’.
For example, if you think of retirement in isolation, it could be many decades away. But if you see it as a step on a broader journey, it can be much easier to reconcile it with today.
It can be helpful to start with the short-term future. Think about who you want to be just 12 months from now, and set goals that will help you become that person in a step-by-step way.
For example, if you want to take a holiday this time next year, you can’t expect to save all the funds in the eleventh month. You’ll need to have a plan for what you will do in one, three and six months time and goals you’ll use to measure progress. For example, “in one month, I will have saved $300 towards the trip.”
This approach allows you to check in regularly and keep a connection between your present and future self.
Once you are comfortable with a 12-month plan, you can build these out to 5 years, 10 years, etc. By keeping small milestones as part of a broader plan, you are maintaining a connection between present and future you.
Align your financial plans with your values
An important part of knowing who you are today and who you will be tomorrow is understanding your personal values. When asked, many people struggle to articulate their values, but they are important to how you live your life today and what plans you make for the future.
Aligning financial goals and spending with your personal values is all about getting the most out of your money. It enables you to do more of what you love at every life stage. If you are not sure where to start, start with this helpful roadmap, that guides you through setting your values and aligning your spending step-by-step.
It’s all about balance
When thinking about future self-continuity and financial planning, it’s also key to maintain a healthy balance. As a financial adviser, I see the impacts of both extremes regularly – people who spend everything they have now and people who save every cent for the future. No one wants to get to retirement unable to enjoy life, but conversely, you don’t want to forgo every happiness today to service a future that may not come.
In essence, your financial goals should be about living for today while planning for tomorrow.
This is an edited version of an article that originally appeared on Apt Wealth Partners and is republished here with permission. This article contains general information only. This should not be relied on as independent finance or tax advice. If you are after specific professional advice, speak to your registered tax agent/financial advisor or reach out to Apt Wealth Partners.