“Future me” has always seemed so far away from “present me”. What do I want to be doing in x years? What kind of life do I want? And how much do I need to create it? These are important questions, but I try not to ask them. They provoke fear and anxiety. Besides, why worry about 20 or 40 years down the line? Why not rather live in the present?
For years, my personal motto has been “I’ll cross that bridge when I get to it.” A ‘protective’ mound of sand in which to bury my head, if you will. While this has helped me keep perspective at times, it’s also had the unintended effect of shielding me from making any concrete decisions about my future. But when it comes to money, there really is little to be gained from this kind of thinking, especially when you know years in advance that the bridge is coming.
It doesn’t bode well, for me or millions of others. South Africans are some of the worst savers in the world, with only an estimated 1.7% of household expenditure going towards savings and investments. About 70% of South Africans of retirement age now qualify for social grants and, according the 2014 Old Mutual Saving & Investment Monitor, 1 in 3 people don’t have any form of retirement savings. 43% of the youth population don’t have formal retirement plans at all and over a quarter of 18-30 year olds don’t feel that saving is a priority right now.
However, it is positive to see that 80% of South Africans surveyed want to learn more about saving. And that there are things that can make saving more compelling.
Economic and psychological research suggests that people are more likely to save and invest the more concerned they are with their future. Those who are unable to visualise a realistic version of themselves in the future tend to shy away from saving and investing. Without a sense of connectedness to our future self, we can end up forgetting about our future needs.
Then again, encouraging people to visualise their future self can help them become more future-orientated, especially when it comes to achieving long-term savings goals. Various techniques have been used to foster a sense of connectedness with our future selves – writing a letter to your future self; setting a retirement date now; consistently monitoring progress towards smaller goals – but one of the most interesting methods employed has been age-morphing photos of yourself to look older.
In a 2008 study at Stanford University, researchers examined how virtual alterations to their physical appearance can affect people’s willingness to save. What they found is that people who saw their aged avatars were inclined to save twice as much as those who didn’t see them. This virtual glimpse helped people relate to their future self and, as a result, they were more likely to alter their saving behaviours in the present. It’s an eye-opening finding that illustrates the significant impact forward-thinking can have on present behaviour.
There’s more to saving and investing money than just depositing it into an account. This is just a means to an end, whatever that may be for you. The act of saving and investing has to start with a good heart-to-heart between present you and future you. With a clearer (visual or psychological) picture of your future self, you’re more likely to do things that will allow him or her to live the life you want to live.
 Finweek – “Why are South Africans not saving more?”
 Moneyweb – “The reforms that could save South Africa’s future retirees”
 Old Mutual (PDF) – “Old Mutual Savings & Investment Monitor 2014: Key findings”
 Benefits Barometer (PDF) – “Financial Literacy in South Africa”
 NCBI – “Increasing Saving Behavior Through Age-Progressed Renderings Of The Future Self”
 The Wall Street Journal – “Meet ‘Future You.’ Like What You See?”
Photo by: Rafael J M Souza, broken suicidal pig via Flickr, CC BY 2.0.