By: Shahram Heshmat Ph.D. | January 18, 2022
"Many of our everyday choices require making tradeoffs between the present and the future. These choices tend to have delayed consequences. In general, we want things now rather than later. This tendency is known as present bias. Present bias occurs when individuals place extra weight on more immediate rewards than future rewards. The more we disregard our longer-term interests in favor of immediate gratification, the more likely we will have an overspending problem.
The present bias is partially attributed to judgments of connectedness between the present and future self (Hershfield, 2018). We tend to think about our future selves as if they are someone else, wholly different from who we are today. If we view our distant self as another person who is more of a stranger to us, then the future selves’ well-being is none of our concern.
Feeling psychologically close to one’s distant self motivates more farsighted decisions that could lead to better outcomes in the future, such as having more money, better health, and fewer regrets. So how do we learn to relate to our future selves?
1. Psychological continuity
Psychological continuity refers to the perceived connectedness between the current self and the future self. To feel connected to our future selves means the continuation of our core identities such as values, life goals between the present and future self. When individuals feel similar to their future self, they are more likely to delay present gratification and make plans for the long run. Research has shown that higher levels of self-continuity to be positively correlated with better academic performance and less procrastination.
The inability to imagine a realistic future self fully and vividly is another reason for poor choices over time. Having a vivid view of the future ahead is a sign of social maturity for young adults. Education is shown to enlighten the person about the value of deferred versus current consumption. We might also spend time with older generations (our parents or grandparents) to remind ourselves of what our lives might be like 20 years from now. Vivid examples are often processed more emotionally, and this can affect motivation. For example, people who viewed age-progressed images of themselves expressed increased intentions to save for retirement.
3. Small steps
Another strategy is to frame sacrifices felt by the present self as being less burdensome. The key to reaching long-term goals often starts with small acts. A study demonstrated higher response rates for an automatic savings program when contributions were framed in daily terms, which feel less painful to the current self. For example, $5 a day in savings versus $150 a month."
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