How to Save for Your Future Self: Interact with the Future You

Have you ever thought about yourself in 10 years — where you'll live, what you'll look like, and what kind of lifestyle you'll lead? What about in 20, 30, or 40 years?

While looking into the crystal ball of your own life can be exciting and maybe sometimes daunting, it can also be the secret to shaping that life to look and feel the way you want it. 

When we look at our everyday lives, this makes sense. In order to excel during that major presentation, have a wedding day be as magical as always imagined, and soak up that long overdue safari vacation — the first thing we do is visualize the experience by firmly planting ourselves in the future.

Looking into the future

According to Sarah Newcomb, author of the bookbook. Opens a new window in your browser, "Loaded: Money, Psychology, and How to Get Ahead without Leaving Your Values Behind," the ability to save is not based on a personality type or luck. It is instead rooted in family history, culture, and — most importantly — the personal stories we tell ourselves.

The answer to becoming a better saver, Newcomb said, is to paint a picture of your future life and step inside of that picture. As a behavioral economist, Newcomb has found that people who are better at sketching the future tend to save more for the world they envision.

When people are younger, their timeline often doesn't extend far enough into the future to inspire them to save in the now. Due to what's called distance psychology, how we think about an idea (like saving for our kids' university funds) depends on how close we are to that event. If a person is in their 30s, for example, and may be thinking about having kids, buying a house, and getting ahead in their career, retirement can feel very far away.

Like looking at a landscape drawing, some things seem closer because they are bigger or have more immediate detail, while others seem far away because they are smaller and less defined. If you bring clarity to that image of your future, Newcomb affirmed, it can make it easier to save.

“We have to be really conscious to flip that image and focus on the long-term," she said. "Then you can go back to your day-to-day concerns."

If this type of visualization doesn't come naturally, there are plenty of things you can do to get there. In her research, Newcomb found that even people who spend some time thinking about where they want their finances to be will see changes in how they save and spend.

“Put clarity and detail into that future mental picture," she explained, "and it will be more a more effective way to save."

Another way to do this? Generate an actual future picture of yourself.

An image of your future self

“A 2011 study2011 study. Opens a new window in your browser in The Journal of Marketing Research found that students who interacted with an “age-progressed" or future version of themselves — in the form of an immersive virtual reality avatar — allocated more resources toward the future.”

Participants were told to imagine they had unexpectedly received $1,000 and were given 4 options for how they could spend it: use it to buy something nice for someone special; invest it in a retirement fund; plan a fun and extravagant occasion; or put it into a chequing account.

As it turned out, participants exposed to their future selves allocated more than twice as much money toward the retirement account than did participants who were exposed to only their current selves. “The people who interact with their future selves have much stronger savings intentions than people who don't," Newcomb said.

Even Newcomb, who calls herself “a spender by nature," has had success with this tactic. When she made an age-progressed picture of herself as a 75-year-old woman (there are a number of appsapps. Opens a new window in your browser that do this) and put it on her desk, it made her think daily about her desired lifestyle once she reached that age.

“I have never been so [motivated] to save as when I was looking at that older version of myself."