Don’t stop thinking about tomorrow: How our vision of our future selves impacts our finances

Published on: March 3rd, 2021

If you struggle to stay focused on long-term financial goals, such as saving for a big purchase or growing your superannuation, you’re not alone.  It’s a common problem and one of the key reasons is that most of us find it difficult to identify with who we will be in the future.

What is future self-continuity?

Future self-continuity refers to the ability to make a connection between who you are today and who you will be in the future. It’s difficult to do, and, in fact, it can be easy to resent ‘future you’ as someone who is having a negative impact on your life today.

Lack of self-continuity is one of the reasons it can be difficult to make voluntary contributions to superannuation. Intellectually, we know that if we put money in super today, it will grow and be very useful to us in the future.  However, when we weigh it up against what we want now, something we might not use for 10, 20 or even 30 years can look like a less appealing option!

But the reality is that to set and meet financial goals that will ultimately allow you to live for today while planning for tomorrow, its critical to visualise and connect with ‘future you’.

Say hello to future you

There are some things in life that we know are going to happen – as long as we are lucky enough to say fit and healthy to realise them, of course. Thinking about these as a course of events rather than isolated ones can help you to see and connect them to ‘present you’.

For example, if you think of retirement in isolation, it could be many decades away, but if you see it as a step on a broader journey, it can be much easier to reconcile it with today. It can be helpful to start with the short-term future, such as thinking about who you want to be just 12 months from now and setting goals that will help you meet it in a step-by-step way.

For example, if you want to take a vacation this time next year, you can’t expect to save all the funds in the eleventh month. You’ll need to have a plan for what you will do in one, three and six months and goals you’ll use to measure progress, for example, in  month, you’ll have saved $300 towards the trip.  This approach allows you to check in regularly and keep a connection between present and future you.

Once you are comfortable with a 12-month plan, you can build these out to 5 years, 10 years, etc. By keeping these small milestones as part of a broader plan, you are maintaining a connection between present and future you.

Align your financial plans with your values

An important part of knowing who you are today and who you will be tomorrow is understanding your personal values. When asked, many people struggle to articulate their values, but they are important to how you live your life today and how you plan for the future.

Aligning financial goals and spending with your personal values is all about getting the most out of your money and enabling you to do more of what you love at every life stage. If you are not sure where to start, we’ve created this helpful roadmap, that guides you through setting your values and aligning your spending step-by-step.

It’s all about balance

When thinking about future self-continuity and financial planning, it’s also key to maintain a healthy balance. As a financial adviser, I see the impacts of both extremes regularly – people who spend everything they have now and people who save every cent for the future. No one wants to get to retirement unable to enjoy life, but conversely, you don’t want to forgo every happiness today to service a future that may not come.

In essence, your financial goals should be about living for today while planning for tomorrow, and at Apt, that’s what we’re all about. If you are interested in finding out more about how our advisers can help you reach your goals today and tomorrow, get in touch.

General Advice warning

The information provided in this blog does not constitute financial product advice. The information is of a general nature only and does not take into account your individual objectives, financial situation or needs. It should not be used, relied upon, or treated as a substitute for specific professional advice. Apt Wealth Partners (AFSL and ACL 436121 ABN 49 159 583 847) and Apt Wealth Home Loans (powered by Smartline ACL 385325) recommends that you obtain professional advice before making any decision in relation to your particular requirements or circumstances.