Future You wants you to save more

The problem is we value rewards today more than rewards in the future. But Future You wants you to rethink that strategy ASAP.

Since having kids, I’ve found it hard to imagine the future. When they were babies, it was difficult to imagine what it would be like with toddlers. Once they became toddlers, I had trouble picturing them as “tweens”. And now, as a father of two teenage daughters, adulthood seems a long way off.

I’m not alone in being unable to ‘meet’ my future self. Creating ‘future self-continuity‘ is a difficult thing to do without deliberate reflection.

We get so caught up in the present that any idea we have about the future is heavily skewed by our world as it is today.

Ten years ago, who would have guessed we’d be starting trials for driverless cars? Who could have predicted COVID?

Future You wants to meet you

It’s really hard to picture what your life will be like down the track. The problem with this in relation to money is we value rewards today more than rewards in the future. So we spend more today and save less for the future.

A study conducted at Stanford University back in 2008 using immersive virtual reality found that subjects who saw an image of their 70-year-old selves allocated significantly more to retirement.

The study has been replicated many times, with one recent experiment finding that subjects’ financial literacy actually increased when they viewed an age-progressed digital avatar of themselves.

Imagining the future may help create it

Twelve years along and Virtual Reality has come a very long way (check out this VR glove with a realistic sense of touch). Imagine if you could see what your life in later years might look like?

What if you could feel it? Even experience it? What sort of lifestyle you might be able to lead based on how much you’ve saved? What about holidays, cars, wine? How could you help your family?

Do you think getting to know Future You would help you to save more?

While VR technology is not quite at our fingertips (just yet). You can get an idea (just as I did) of what the older version of you might look like using apps like Face App or AgingBooth.

Every now and then I look at myself as an old man and think about the choices I’m making. Not just the money choices but health, family and all aspects of my life.

I’m pretty sure that your future self will thank you for that kind of reflection, too.

This is an edited version of an article that originally appeared on Do Well + Good 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 Dave at Federation Financial Services.