FutureYou Thinks You Should be Saving More

Since having kids, I’ve found it hard to imagine the future. When they were babies, it was difficult to imagine what it would be like with toddlers. Once they became toddlers, I had trouble picturing them as “tweens”. And now, as a father of two daughters (age 12 and 11), I’m trying not to think about what it will be like when they are teenagers!

We get so caught up in the present that any idea we have about the future is heavily skewed by our world as it is today. Ten years ago, who would have guessed we’d be starting trials for driverless cars?

It’s really hard to picture what your life will be like in the future. The problem with this in relation to money is we value rewards today more than rewards in the future. So we spend more today and save less for the future.

A study^ was conducted at Stanford University back in 2008 using immersive virtual reality found that subjects who saw an image of their 70 year old selves allocated significantly more to retirement.

Nine years down the track and Virtual Reality has come a very long way (check out this VR glove with a realistic sense of touch). Imagine if you could see what your future life might look like? What if you could feel it? Even experience it? What sort of lifestyle you might be able to lead based on how much you’ve saved…what sort of holidays, cars, wine, how you can help your family.

Do you think it would help you to save more?

While the VR technology is not quite at our fingertips (just yet). You can get an idea (just as I did) of what the older version of you might look like using the app Ageing Booth. Every now and then I look at myself as an old man and think about the choices I’m making. Not just the money choices but health, family and all aspects of my life.

 

^ FEELING MORE CONNECTED TO YOUR FUTURE SELF: USING IMMERSIVE VIRTUAL REALITY TO INCREASE RETIREMENT SAVING Ersner-Hershfield, H., Bailenson, J.N., & Carstensen, L.L. (2008).

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