Perhaps the biggest source of human misery is the tradeoff
between short-term and long-term goals.
We are wired to do what seems best to us right now, even if those
actions conflict with what is best for us in the long-term. That is why we eat that piece of cake instead
of dieting. It is also why we spend our
money now rather than saving for retirement.
In order to protect our future self from our current self,
we have created retirement accounts where we put some amount of our money now
so that we’ll have enough to live on when we get older. In many companies, employees are required to
put a certain amount of money away for the future, and then they have the
option to save even more.
Often, people do not put away enough money for their
retirement. There are lots of reasons
for this. For one, there are lots of
expenses in the present that are important, and so it is just hard to find
enough money to save for the future. But
even when it is possible to save for the future, your ‘old’ self feels distant
from who you are now. It is hard to deny
your current self to benefit the person you will be after you retire.
So, what can you do to help yourself save enough for
retirement?
This question was explored by Christopher Bryan and Hal
Hershfield in a paper in the August, 2012 issue of the Journal of Experimental Psychology: General.
They point out that there are two distinct ways to try to
convince people to save for their future.
One is to remind people that it is in their own best interest to save
money for the future. That is, people must
be reminded that the money they save now will be money they get to use
later.
The second is to appeal to people’s sense of social
responsibility. People may have a hard
time visualizing their future self, but they certainly know that self is
someone close to them. And most people
spend money on their close relatives in addition to themselves. So, appealing to people’s responsibility for
their future self may be an effective way to get them to save for the future.
To test this idea, employees at a university were given one
of two persuasive messages about retirement savings. One message focused on how retirement savings
were in the person’s best interest. The
other message focused on how saving for retirement was a responsibility to that
person’s future self. The researchers
also gathered information about how socially close people felt to their future
self. Finally, the researchers gathered
information from the university benefits office about how much money people
chose to save for retirement after seeing the messages.
The message about self-interest had no influence on people’s
behavior. That is, reminding people that
it was in their self-interest to save for retirement did not spur additional
savings. The message about
responsibility for the future self did affect some people, though. In particular, people who felt socially close
to their future self were much more likely to save additional money for retirement
after being exposed to the message about responsibility. Those people who did not feel socially close
to their future self were not much more likely to save for retirement.
The results of this study suggest that if you want to help
protect your long-term self from your short-term self, there are two things you
need to do. First, spend some time
thinking about who you are going to be as you get older. This exercise will help you to feel closer to
the person you will be in the future.
Second, remember that you have a responsibility to treat your future
self as you would any member of your family.
