Written by Jean Chatzky, Host of Your Money Map show, and Education Fellow, Alliance Retirement Income Institute
Recently, I took part in an exercise that was the antithesis of vanity (or maybe the antithesis of Instagram, take your choice.) I took my most recent headshot, uploaded it into a free app called Aging Booth and let it have its way with me – layering on wrinkles, graying the hair I work hard to keep a very natural brown, doing unthinkable things to my neck – to transform how I may appear 30 years in the future. Why, you may ask would I subject myself to this? Research. I wanted to see if – as studies have suggested – looking at myself older would inspire me to want to take better financial care of my future self. (BTW, the jury is still out regarding my finances. It did, however, inspire me to look into which Vitamin C serum had the best chance of preventing age spots.)
Getting people to do the right thing for the future versions of themselves is what Hal Hershfield, UCLA Professor of Marketing, Behavioral Decision Making, and Psychology has spent decades working on with colleagues. And Hal’s series of studies inspired me to put my face to the test. It was all the way back in graduate school that he became intrigued in how people change over time and, specifically, “why it’s so hard for people to think about the future,” he says. “There is a lot of deep psychology behind it, even though it’s a very practical question.” Hershfield recently published a book – Your Future Self: How to Make Tomorrow Better Today – that contains a lot of the answers, as well as suggestions for ways you can act now to improve your life down the road or whatever your next chapter in life.
Watch Your Money Map: Reflect on Your Future Self So You Can Plan For It
Getting people to do the right thing for the future versions of themselves is what Hal Hershfield, UCLA Professor of Marketing, Behavioral Decision Making, and Psychology has spent decades working on with colleagues. He joined Jean Chatzky to discuss planning for your future self.
Hershfield recently published a book – Your Future Self: How to Make Tomorrow Better Today – that contains a lot of the answers, as well as suggestions for ways you can act now to improve your life down the road or whatever your next chapter in life.
What do we mean, exactly, when we talk about our future selves? It really boils down to the specific goals and aspirations you have for yourself – and how they’re all interconnected. In 25 years, for example, Hershfield has a goal of continuing to teach a little in the future, travel some, and be near his kids and maybe grandkids in retirement. In 5 years, he wants to be in roughly the same shape he’s in now. And tomorrow? He wants to wake up early enough to work out before he has to embark on doing a “gazillion things” with the kids. The problem is, in order to get to that 5-year goal – and then that 25 year goal, he actually has to check the box on this daily goal (as well as financial ones that include saving a little more, spending a little less, and having enough to last throughout life.)
Do One Thing
That sounds simple, but in fact, that’s where you get the pushback – again, from yourself. It’s all too easy to hit the snooze button and skip a workout, but do that too often and that 5-year goal of being in roughly the same shape will be impossible to hit. That’s why Hershfield believes approaching change in the smallest possible pieces and then setting “an implementation intention” is the way to make sure you check it off your list.
Think first about your big picture goal. Let’s say it’s saving more money. Then parse the exact steps that need to happen in order for you to get there, and figure out the specific things you’re saving for. Maybe you need to call your financial advisor? Or talk to someone at your bank? Or to sign onto your benefits portal to increase the percentage of pay flowing into your 401(k). “Knowing that is fine and well, but what needs to happen in order for you to take that action,” he says. That could mean looking at your calendar to see that you’re free Wednesday at noon and scheduling yourself time to do this one thing. “It requires some work and some thinking. But without the explicit and detailed plan it’s easy for it to [slip through the cracks,]” he explains.
Make It Stick
There’s change, and then there’s lasting change. If you’re looking to embrace the factors that are best for sustained financial success, Hershfield suggests focusing on the following things.
- Make saving an automatic part of your life. This, is the reason that 401(k) and other work-based retirement plans work. You don’t see the money leave your paycheck (in fact, you don’t have to do anything in order to move it) rather it goes automatically. “That way it never becomes a question, but rather it’s something that just happens in the background.” One thing you’ll want to remember is that 401(k)s are not the only vehicles that can be utilized this way. You can schedule automatic transfers to IRAs, 529s, HSAs, and savings accounts for any purpose you like including emergencies. As I wrote in my book, Money Rules: #11: If you don’t see it and you don’t touch it, you won’t spend it.
- Recognize what’s most important to you from a values standpoint – and try to tie those values back to the way you spend money today. If you’re not sure what you value, track your spending for a month. Then go back and look at your list of expenditures asking the question: Would I do this again? If the answer is yes, you know that’s something of value to you.
- Finally, and perhaps most important, try to feel an emotional connection between who you are now and who you want to be. If you’re up for it, do what I did. Download the Aging Booth App and let yourself experience what it’s like to look at yourself older. That may be all it takes to get you off the dime. In Hershfield’s original research on photo aging, he and his colleagues note that earlier studies suggested that “the emotions an individual feels in the present are much stronger than the emotions that the same individual expects to feel in the future.” That’s why we are willing to allocate more of our resources to things that are happening now. But in fact – humans don’t react that way. When something emotional happens we feel it similarly, whether it happens next week or next decade. The experiment helps consumers recognize this. Moreover, you don’t even have to think about aging as you’re doing it – you just have to look. I suggest giving it a try. I can tell you from personal experience… it wasn’t so bad.
For ways to plan for your future-self financial needs and wants, here are some easy tools and guides to help get you started.
Related: Five Social Security Myths Busted