Looking out for future you.
Behavioural finance expert Dr Campbell Heggen, looks at the ‘hacks’ we can use to help maintain discipline when working to long-term goals like saving for retirement.
A lot of important decisions that concern our health, wellness, financial security, and careers involve choices that require trading off immediate pleasure for your future good.
Unfortunately, our humanness means we aren’t very good at delayed gratification. But thinking about our future self can help save more for retirement and adopt healthier behaviours today.
Now versus later
We all know that eating less and exercising more is good for our future selves. But faced with temptation it can be easy to overindulge today and promise ourselves to start a new, healthier lifestyle ‘tomorrow’.
Similarly, we understand the long-term benefits of spending less and saving more, but many of us find it hard to make the short-term sacrifices required to improve our future financial security.
It turns out our brains are hardwired to prioritize smaller, more immediate rewards over large, long-term rewards. And from an evolutionary perspective, this makes complete sense. Our hunter-gatherer ancestors would have been more than willing to accept an easy, small meal now, rather than hold out for something bigger to come along later – in fact, their survival depended on it.
The problem is we tend to overweight these small, immediate rewards, because we are not very well equipped to think about how our immediate decisions may affect our future selves.
So how can we increase our chances of achieving our health and financial goals?
Empathise with your future self
Long-term goals are difficult because the future is fuzzy and uncertain. However, researchers have discovered that coaxing individuals to think about or visualise their future self increases their likelihood of adopting better behaviours today.
In one study, participants who were encouraged to write a letter to their future self in 20 years subsequently reported exercising more. The researchers also found that individuals who reported a higher connection with their future-self also scored higher on a health assessment. 
Empathising with your future self may also help you reach your savings goals. In one of my favourite studies, young adults who were shown digitally aged photos of themselves committed to saving more for their retirement. 
Break down big goals into small manageable chunks
We often set big, ambitious goals, because they yield big, ambitious rewards. However, big goals (like running a marathon or saving for retirement) take a while to achieve – so the big reward only happens far in the future.
Break long-term goals into a series of smaller, short-term targets. That way you get to enjoy the feeling of success sooner and more often.
Pre-commitment is a way to lock future you into decisions, by removing temptation and making it harder for future you to back out.
Many people find that having a training partner helps to keep them accountable and reduces the temptation to skip a training session. Likewise, pre-committing to a regular savings plan can help to keep your financial goals on track.
Paying yourself first is one way to ensure that saving becomes a regular habit. Rather than waiting until the end of the month and saving whatever is left, try setting up a regular, automated payment which transfers part of your salary into a savings account before you can be tempted to spend it.
Acknowledging and consciously evaluating trade-offs between now and the future can go a long way to ensuring a happier, healthier future you. You owe it to yourself to give it a try.
So, now what?
If the above article resonates with you, then the team at Highview strongly suggest you book a Discovery Meeting with one of our experienced Financial Planners Bruce Chisholm or D’Avery Pillay. This is a great way to assess your current situation, find your financial ‘trainer’ and really take action to set yourself up for retirement – for FUTURE YOU! Contact your local Highview office today to start the conversation and book a meeting!
 Rutchick, A.M., Slepian, M.L., Reyes, M.O., Pleskus, L.N., & Hershfield, H.E. (2018). Future self-continuity is associated with improved health and increases exercise behavior. Journal of Experimental Psychology: Applied, 24(1), 72–80.
 Hershfield, H.E., Goldstein, D.G., Sharpe, W.F., Fox, J., Yeykelis, L., Carstensen, L.L., Bailenson, J.N. (2011). Increasing saving behavior through age-progressed renderings of the future self. Journal of Marketing Research, 48(SPL), S23–S37