Universidad de Manila

659-A Cecilia Muñoz St., Ermita, Manila

Future Self

Submitted to:

Mrs. Diola

Submitted by:

Bautista, Nhorlyn B.

BEN11
 Universidad de Manila

659-A Cecilia Muñoz St., Ermita, Manila

THE FUTURE SELF

BY DIMITRIS MAVRIDIS AND STEFAN VAN WOELDEREN

You are not alone. A 2016 survey commissioned by ING showed that more than half of
all people in Europe and elsewhere do not set clear financial goals. It is safe to say that
many who do, don’t stick to them.

A diverse group of academics and practitioners, including the authors of this article, have
taken up the challenge to systematically help people’s long-term planning and decision-
making, in order to ensure future (financial) goals are set and (stay) achievable
throughout their lives. So: how to live today and effectively plan for tomorrow.

The project, in three stages, is called ‘Future Self’. The practical solution the team
develops will be founded on the insights that come from the research part of the project.
Conversely, the data retrieved from the practical solution could benefit future research.

VISUALISATION IS KEY

Your future self could help you make decisions on the basis of a visualization.
Visualization of goals, suggested actions, impact of actions on long-term goals, progress
towards achieving a set goal, and offering help or dialogue-based guidance and advice –
e.g. via instant feedback based on data - to get people back on track if needed.

First an understanding of the variety of responses to major life events across the
population is needed. For example a divorce, can open new positive opportunities for one
individual, but it can be devastating for another. The financial consequences can differ
sharply as a result of personality traits and differences in social and financial situations or
outlooks. It is important to deeply understand this, because helping people in their
decision-making requires a tailor-made approach, at least to a certain extent.

Moreover, life events that are normally not considered potentially impactful on long-term
finances could have surprisingly big implications on spending patterns and therefore on
long-term savings. For example, there is some evidence that gaining or losing weight,
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659-A Cecilia Muñoz St., Ermita, Manila

and the social consequences related to that, can be financially more impactful for some
than well-known major life events such as giving birth or marriage.

Stage one of the Future Self project uses models from psychology and a household
survey to understand evidence from the past (‘past self’), combine it with the current
situation (‘current self’) and predict how that relates to a person’s ‘future self’.

Stage two will be about stimulating people to set goals and converting those goals into
actions. We want to find out more to what extent visualization and personalization help or
hinder people to set goals; and how that differs between the types of goals. This stage is
also about helping individuals translate good intentions into action. Randomized
controlled trials could for example be used to test whether specifying implementation
intentions help people turn goals into actions.

Stage three will be about helping people to stay on path to reach their goals. On the
research side this phase is about understanding the paths people need to take to reach
their goals and to understand how a practical (planning) tool can help people stay on track
to achieve their goals, also in case of (unexpected) major life events. How can we help
people better manage the impact of potential life-changing events?

Three Key Principles of ‘Future Self’ Thinking

One of the most powerful concepts I’ve ever come across in my years of studying and
thinking about personal finance issues is the concept of the “future self.” “Future self” is
pretty much exactly what you think it is: It’s you at some point in the future. It’s not an
optimistic version of your future or a pessimistic version of where you’re headed, but
instead it’s as realistic as you can possibly make it.

A Real Look at My Future Self

What does my future self-look like?

In 10 years, I’ll only have one child at home, and he’ll be gearing up to leave the nest the
following year. I assume I’ll still be married, as our marriage seems pretty good.
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659-A Cecilia Muñoz St., Ermita, Manila

Unless I change some things, though, I’ll likely still be overweight, and that’ll have some
health impacts by then. If I keep on my current pace, I’ll be in better financial shape than
I am right now, but I still won’t be where I want to be. I’ll still have a limited social circle
and fairly limited standing in my community.

The Connection between Today and My Future Self

The choices I make today shape the life of my future self.

My financial choices today determine the financial options my future self will have. If I
spend money foolishly right now, it might be fun in the moment, but I’ll forget it in short
order. On the other hand, if I’m selective about the nonessentials I spend my money on
right now, I’m going to have a life later on that has an abundance of options.

My professional choices today determine the professional options my future self will have.
If I choose to waste time instead of doing productive things, or even if I do nothing more
than just completing my work tasks and never step beyond those immediate tasks, I’ll
never build the skills and reputation I need to move my career to a good place. I’ll always
be stuck right where I am right now.

My social and community choices today help determine my social and community
opportunities tomorrow. If I want to build a stronger social network, then I can’t afford to
stand in the corner by myself at social events (or, even worse, avoid them entirely). I need
to socialize and build relationships. Friends don’t fall out of the sky. If I want to be a pillar
of the community, I need to not talk myself out of going to community events and I need
to not avoid volunteer tasks. My health choices today help determine my overall health
and energy tomorrow. What I put in my mouth today is the biggest factor, of course, but
so does my level of exercise and moving around. The better I eat today and the more I
exercise today, the healthier I’ll be and the better I’ll look down the road.

I could go on and on like this, but all of those examples are centered on a few key
principles.
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659-A Cecilia Muñoz St., Ermita, Manila

The Key Principles of ‘Future Self’ Thinking

If something you do today doesn’t have a long-term benefit, then it’s probably not
worthwhile to do it. If you can’t easily articulate how this action benefits you in the future—
and by future, I mean months and years down the road—then it’s probably not an action
worth taking.

When I sit down for a meal, my short-term brain is telling me to eat lots of whatever the
most delicious thing is, but from a long-term perspective, that’s a terrible thing to do. That
approach is not a good choice in terms of long-term benefit; in fact, it’s a long-term
disaster. The better approach is to eat a variety of foods, but only eat until I’m not hungry
anymore and then stop. I can sure sample some of the tasty stuff, but there’s no reason
to eat too much of it. Most of the pleasure comes from the first few bites, anyway, and
when that feeling of hunger goes away, there’s no reason not to sit down the fork.

When I go into a bookstore, my short-term brain is telling me to buy several books—I’m

an avid reader, after all, and books are wonderful things! From a long-term perspective,
though, that’s not a very good choice. While I do gain long-term access to that book, I’m
spending money for it and I’m also going to have to consider how to store it. Thus, it
makes far more sense to instead choose to buy only books that I’ll read many times over
or refer to regularly. How do I know whether I’ll read a book many times over or refer to it
regularly? I check it out at the library first. That way, I don’t have to spend money on a
book that isn’t necessarily near and dear to my heart. When I’m thinking about how to
spend my evening, my short-term brain is telling me to veg out and do some web surfing
or check out social media. From a long term perspective, though, that’s going to have
almost no benefit at all. I’m far better off spending that time with my wife and my children
to build family relationships, or spending it going to a community event where I can build
social relationships and community standing, or spending it taking an online class where
I might learn something, or spending it reading a challenging book to stretch my mind, or
spending it exercising and improving my long term health outcomes and physical
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659-A Cecilia Muñoz St., Ermita, Manila

appearance, or spending it doing household chores that will spare me time later on when
I don’t have an evening to spare.

The second principle is similarly simple: doing something with an eye toward the long
term does not mean being miserable today. It does mean, however, that you might have
to dig a little deep and try things in a different fashion.

For example, making a shift in your spending choices might feel miserable at first, but the
key is to just try lots of different strategies for spending less money and seeing what
actually works for you. Does store brand hand soap work well for you? Do you actually
even notice the difference? What about making cold brew coffee in your refrigerator and
then heating it up in the morning instead of stopping at a coffee shop? There are lots of
little things you can do. Some will work and some won’t. However, simply trying some of
them has a nice long term benefit, because if you discover a more cost effective way of
doing things or discover that you weren’t actually getting much value out of an expensive
way of doing things, you’re winning in terms of the long term financial race.

Making a shift in terms of what you eat might seem miserable to some, but the true key
to sustainably improving your eating is to try lots of different foods that are good for you
and see what things you really like and really don’t like while still enjoying many of the
foods you currently like. More than anything, it means slowing down and paying attention
to your body, and putting the fork down when your body is no longer signaling “I’M
HUNGRY!!”

Making a shift in terms of how you use your free time might seem miserable to some, but,
again, the key is to find things that you enjoy and leave you fulfilled, whether it’s fulfillment
in the moment or a true sense that you’re building something great for the future. If you
do something in your spare time and you’re not fulfilled... what value does it have? Find
something that leaves you feeling fulfilled and makes you feel like you’re building
something bigger than the moment, especially when you can also find joy in that moment.
You’ll almost never go wrong.
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659-A Cecilia Muñoz St., Ermita, Manila

The third principle is also invaluable: Constantly evaluate your choices and don’t be afraid
to criticize yourself as long as it points you toward improvement. Absolutely no one on
earth is perfect at this kind of thinking. We’re all wired to be short term creatures, dating
back to our savannah days when we were under constant threat of attack from animals
and rivals and the threat of starvation. We thought short term because we had to, and
those that were wired for it were the ones that survived.

Today, we don’t have to think in those short term ways (in fact, we probably shouldn’t),
but we default to them anyway because that’s how we’re wired. Sometimes we simply
slip up and follow that short-term route.

The difference between success and failure isn’t that you always put your future self-first,
but that you step back and think about your moves, ask why you’re making them, and try
to think of ways to make them better.

There are a number of strategies that work well for this.

One great strategy is to think about your day-to-day choices while commuting or doing
other things that might not require all of your concentration. Just run through things you
do all the time or have done recently and evaluate their impact on your future self. If you
don’t like that impact or you can’t see any positive impact, then ask yourself whether there
was a better way to use your time or energy or focus or money.

Another great strategy is to journal. Simply put aside several minutes each day to actually
go through your day, think about your best moves as well as your worst mistakes, and
then evaluate them a little bit. How can you make that “best move” into a pattern? How
can you do better in terms of your “worst mistake” so that you don’t repeat it? The act of
writing things down on actual paper is a great way to stir thought. I find that any technique
that can help improve your focus is a good thing. Cell phones are a constant focus
destroyer, so I often turn my cell phone off completely and don’t carry it with me all the
time. When I’m working on a task at my computer, I turn off as many potential distractions
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as possible. I also put aside time each day for mindful meditation, which is basically what
I consider to be a “bicep curl” for my ability to focus on the moment and the task at hand.

Define Your ‘Future Self’

So, what does your future self-look like?

This is actually a hard task to take on because many people have a naturally optimistic
view of the future. People tend to think that things will turn out well overall. They tend to
think that the good things in their life will continue and that at least some of the bad things
will improve.

Taking a realistic look at your future self can be painful, and people generally don’t like to
do so. No one wants to see a future for themselves that isn’t bright.

The goal of this isn’t to envision an apocalyptic scenario for yourself. The goal is to
envision what exactly will happen to you if you continue with your current choices and
routines.

Is your net worth building from year to year? How much did it grow or shrink last year? If
you forecast that change forward for 10 years, what does that look like? Don’t try to make
“exceptions” for something “special” this year, because most years will have something
“special.” This type of exercise is much more of a reflection on your day to day money
choices.

How is your career doing? Are you actively moving forward on projects? Are you building
skills that will help you get a promotion or a pay increase? Or are you just holding in place
because you can? Is there any risk of your job being automated in the next 10 years or
20 years? What are you doing about that? If you don’t change what you’re doing in terms
of building your career, where will you probably be in 10 years?

How are your core relationships doing? Do you have a core set of friends you’re happy
with? If not, what are you doing to find those friends? If you’re not actively doing much,
then you’re not going to build a social circle for yourself. Do you have a strong marriage?
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659-A Cecilia Muñoz St., Ermita, Manila

What do you do each day to keep it strong? Do you have children? How is your
relationship with them? What do you do each day (or a little less frequently if they’re older)
to keep that relationship strong?

How is your health doing? Are you gaining weight? Holding steady? Are you at a healthy
weight? Do you move around enough? Remember, over the next 10 years, almost all of
your health factors are going to move a little bit in a bad direction, and if you’re not making
positive health choices to counteract it, you will slowly decline.

You can evaluate your spiritual life, your mental health, and all other key areas of your
life in the exact same way. If things are just holding steady in those areas, are you happy
with steady? Is your life in 10 years in a good place if you just hold steady in that area?

Almost always, what you’re going to find when you take a realistic look at your future self
is that you don’t like some of the aspects of that picture. Maybe you’re unhappy with your
health or with your career or with your relationships. Maybe you’re unhappy with a lot of
things.

That’s good. You should be unhappy with something. That means you want a better life
for yourself and that’s the surest way to start improving.

Improving Your Future Self

So, how exactly do you do that? How do you take this realistic view of your future self and
use it to build something better?

It’s easy. You just take those areas that bother you most about your future self and focus
on improving those areas by consistently making long-term choices in your daily life in
those areas, as described earlier on.

If you’re concerned about the health of your future self, start making long term health
choices each and every day. Choose to eat a better diet. Exercise a little more. You don’t
have to make radical changes. Just make some changes that will last. Simply start
thinking about your future self when you’re being sedentary or when you’re about to put
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food on your plate at supper. Remember, if you put yourself on pace to lose about a
pound a month, which literally means just eating 100 calories less a day, you’ll drop quite
a bit of weight over the next 10 years, slowly but surely. That’s not a radical change at all.

If you’re concerned about the finances of your future self, start making spending choices
that are more long-term oriented every day. Stop spending money on the most frivolous
elements of your spending. Find some smart substitutes for your regular expenses. Look
at buying some nonperishable things in bulk. Every time you’re about to spend money,
give it a consideration with your eye toward the long term.

If you’re concerned about your long term career, start making choices at work with an eye
toward the long term rather than just getting through the day. Look at what you can
improve in terms of your job performance. Whenever you notice yourself sitting around
doing nothing or checking out, see if there isn’t a way to use that time better to improve
your long term job prospects. Consider whether education might not help you out here
and then take on the challenge of getting that education.

Whatever area it is—financial, professional, social, physical, mental, spiritual, and

familial—look at the choices you make today and then ask yourself what the best long-
term version of that choice is.

What you’ll find is that, once you start doing this, it doesn’t really feel “miserable” any
more. You start to see how your life is going to get better because of these choices, plus
you begin to realize that you’re not really losing much in the short term either.

Final Thoughts

The final point I want to leave you with is this: The perfect is the enemy of the good. The
goal of “future self” thinking isn’t to switch to some sort of perfect being that’s always
focused on the optimal life. Not only will that never happen, it’s not particularly healthy,
either. Sometimes, the short term choice really is the best choice overall.
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The idea here is to just keep your future self in mind. Think about him or her regularly. I
think about my future self-several times each day. I want that future self’s life to be great,
and that motivates me to make better choices in life. It motivates me to set ambitious
goals, and it motivates me to stick with those goals or find out ways to make something
similar work if the goal is difficult.

I don’t always make the perfect long term choice, but I don’t beat myself up about it.
Instead, I just think about better choices when I’m driving home from dropping my kids off
at soccer practice, or when I’m in the shower, or when I’m going to bed, or when I’m
waiting at the doctor. I spend some time journaling a little bit each day and I usually think
about my future self then, too. The goal is to make the better long term choice slowly
become the normal one, the one I choose by default because it seems like the best
choice.

I’ll never be perfect at it, but that’s not the goal. The goal is to be better at it, and all I have
to do is get a little better at it to make a huge impact on the quality of the life of my future
self. That’s a wonderful goal, indeed.