When you have a concrete picture of your future self, it makes it easier to plan for the long term and, crucially, you’re more likely to stick to those plans.
That’s the conclusion of a major report by insurer Aegon, which reveals that the strength of your connection to your future self can have profound consequences for your health, happiness and financial wellbeing.
Just as picturing yourself driving down Route 66 or sipping a cocktail on a tropical beach can motivate you to save towards your goal, having a clear idea of what your future self might look like can boost your financial security. It can also improve your wellbeing in a range of other ways – read on to find out how.
If you have a clear vision of your future self, you’re likely to be more financially secure
Many people have a clear vision of their future self and see themselves in years to come as an extension of their current identity. These people are often more financially secure and tend to be more ethical in their treatment of others, as they are keen to act in a way that will make life easier in the years ahead.
Conversely, if you find it hard to imagine your future self – perhaps you see them as a separate person with little connection to the person you are now – you are likely to be less worried about the long-term effects of your decisions now.
This is not a new idea. In 1736, philosopher Joseph Butler wrote: “If the self or person of today, and that of tomorrow, are not the same, but only like persons, the person of today is really no more interested in what will befall the person of tomorrow, than in what will befall any other person”.
The notion of a link to our “future selves” also compelled Hal Hershfield, associate professor of marketing, behavioural decision making and psychology at the University of California, to study the idea.
Hershfield suspected that a disconnection from our future selves might explain some of the irrational elements of human behaviour, including a reluctance to save for retirement.
In his study, he showed participants the graphic below with overlapping circles representing the current and future self.
Participants had to identify which pair of circles best described how connected they felt to their self 10 years from now.
It’s an interesting process to go through – which pair of circles represents your relationship with your future self?
Hershfield then compared the responses to various financial planning metrics.
For example, he presented the participants with several scenarios in which they could either receive a smaller reward soon or a larger reward later. As you might expect, the participants who felt a greater connection to their future self were much more likely to wait for the bigger sum.
The professor then looked at the participants’ real-life savings. And, in line with his suspicions, he found that the participants who were better connected with their future selves had saved more.
The Aegon research came up with very similar conclusions. They found that people connected with their future self tend to:
- Be more responsible with their money
- Have a rainy day or emergency fund in place
- Be less likely to have debt
- Be more likely to pay off a mortgage
- Save more.
Of course, thinking more clearly about the future can have wider benefits than just boosting your financial security.
As an example, in a later study, Hershfield found that people’s identification with themselves in years to come could also predict their exercise behaviours and overall fitness.
His research revealed that if you identify strongly with your future self you are more willing to look after your body to make sure that you experience better health in the years ahead.
Financial planning can help you create a better vision of “future you”
Despite the clear benefits of thinking more closely about your future, Aegon found that less than a third (28%) of people have a specific picture of themselves in years to come.
So, what can you do to create a better relationship with “future you”?
Firstly, financial planning can encourage you to consider this issue. A financial plan is not generally designed just to “generate positive returns” – it’s there to enable you to reach your goals, whatever they might be.
A good financial planner starts by asking you about what you want to achieve in the future. That might be:
- Early retirement
- Providing financial support to children or grandchildren
- Leaving a legacy
- Starting your own business
- Enjoying a comfortable lifestyle in later life.
Only when a planner has established your goals – essentially a picture of your future self – can they create a plan to help you get there. And, you’re more likely to stick to this plan because you have clearly envisioned how you want your life to look in the years ahead.
If you are struggling to do this, there are a couple of simple ways you can try and connect with yourself 10 or 20 years from now.
The first is to use an app or other simple software to “age” yourself in a photo. Many smartphones let you upload a photograph of you now, and the app will add 10 or 20 years to your image so you can see what you might look like in a decade’s time.
When Hershfield did this with his participants, he found that they subsequently showed greater responsibility in their financial decision-making.
Alternatively, you could write a letter to yourself 10 or 20 years from now, describing what is most important for you now and your plans for the coming years.
This will also encourage you to feel a greater sense of connection with your future self and, consequently, lead to positive change.