Most of the decisions you make today are aimed at trying to set up your future self for success. But it’s easy to get tangled up in confusing images of exactly who you think your future self will actually be.
The science behind the future self-concept has been studied extensively over the past half century. Professor Hal Hershfield, a behavioral psychologist at UCLA has written a new book titled, Your Future Self- How to Make Tomorrow Better Today. Understanding what goes into how you think about your future self is incredibly important in how well or how poorly you prepare for the future.
The central theme is to consider who you are now versus who you think you will be in the future. Professor Hersfield’s work included reviewing active brain scans of people discussing themselves now and who they expect to be years into the future.
The parts of the brain that are engaged when individuals describe other people are typically the same as when they describe their future selves. In other words, many people think of their future self as a stranger. This has profound implications in terms of how you make financial decisions today.
You make choices today based on who you are today, but these decisions can have big consequences on your financial future. If you have an unrealistic perspective of your future self, these impressions filter into your financial decisions. At a very basic level, it’s difficult to save and invest for the future if you don’t recognize the person you’re saving for.
We often ask clients where they see themselves physically in the future. If you believe you will be in the place you live now, that’s one thing. If you see yourself living somewhere else, that’s another issue. This question brings to light how your life can change in the future.
Professor Hershfield says that if your self-concept is not aligned with your future self, you can easily make decisions that are at odds with your future well-being. His research finds that if your ‘present’ is short, you are more likely to act for the future.
One way to improve your decision making is to maintain flexibility. The ways that you spend your time today may be different from your activities in the future. Think about different versions of the same type of activities in order to make the images more vivid. Maybe you like to play singles tennis today, but that may change to doubles tennis in the future.
Saving more for the future is a common refrain, but balancing the present and the future might resonate better with more clients. How you spend your money and how you spend your time likely won’t be constant.
Plan for the future, but maintain a mature view of time and recognize that your wants and needs will change as time marches on.