March 2024
Barbara O’Neill, Ph.D., CFP®, AFC®
Distinguished Professor and Extension Financial Management Specialist Emeritus
Rutgers Cooperative Extension
2024 marks the 20th anniversary of the Rutgers Cooperative Extension Small Steps to Health and Wealth™ (SSHW) program. Since 2004, SSHW programming and the SSHW workbook have encouraged people to make positive behavior changes to simultaneously improve their health and personal finances.
A key reason for making these changes is to have a better "future self;" i.e., the person that you will become 10, 20, 30, or more years in the future. Ideally, you want your future self to be healthy and financially secure. To do this, you make sacrifices today (e.g., saving money instead of spending it) that can pay dividends down the road.
UCLA professor Dr. Hal Hershfield has studied relationships between current behaviors related to health and personal finances and people's concept of their "future self' and recently wrote a book, Your Future Self: How to Make Tomorrow Better Today. It includes findings from studies by Hershfield and many other researchers in psychology and behavioral finance as well as real life case studies.
Below are six key implications from the book for connecting with, and caring for, your future self:
Be Future-Minded- When people think about their life in the future, they are more likely to adopt positive self-improvement practices. When future selves are like distant strangers, people are more likely to treat them poorly. Think diet, physical activity, and saving money as examples of ways to take care of your "future self." Also, look for positive role models of people who have adopted positive health and financial practices.
Think About Yourself in the Future- Hershfield describes a study conducted in collaboration with the Consumer Financial Protection Bureau. Respondents were asked how connected they felt to their future selves on a scale from 1 to 100. The higher the connection people felt with their future selves, the more money they had saved and the better their overall financial well-being was.
Bridge the Gap- Several strategies were suggested to help people bridge the gap between their present and future selves. For example, people can visualize their future self with age progressed images derived from readily available apps (e.g., FaceApp). Another technique is writing letters to and from your future self to express thoughts, feelings, and goals. One resource to do this is the website FutureMe.
Make Commitments- Commitment device strategies make it harder for people to fall prey to temptation. Examples include recruiting an accountability partner to help you lose weight or save money and automatic contributions and auto escalation of savings in retirement savings plans. Another commitment strategy is removing tempting options (e.g., junk foods and online shopping or gambling apps) from your environment.
Choose Small Steps- Hershfield recommends breaking present day sacrifices for your future self into smaller, easier to accomplish pieces. He calls this strategy "making the big, small" and cites a study that asked people if they'd like to save $150 a month, $35 a week, or $5 a day. When savings was framed in terms of dollars per day, participation in an automatic savings plan increased fourfold versus saving the monthly amount.
Build in Present Rewards- Hershfield describes a technique called "temptation bundling" where people pair positive activities with actions that feel like sacrifices. For example, for every $1,000 of savings, you get to spend $100. Actions to help your future self seem less of a burden when there are current rewards for your present self. Another tip: connect present day sacrifices to future outcomes (e.g., more savings = earlier retirement).
Do you want to improve your health and/or personal finances in 2024? Take steps to connect with you future self!