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Humans are not very good at making healthy long-term decisions. Our natural tendency to focus on what benefits us right now. This includes making poor financial decisions. This isn’t a product of social media or cell phones. Studies suggest that our brains are hard-wired to see our future selves as completely separate people from our current selves. We naturally prioritize decisions that will benefit us right now over things that will benefit the stranger who we’ll become in the distant future making hard to have a retirement mindset.
Who is the Future You?
The problem with this attitude is that our future selves are not strangers. The decisions you make today will impact you for the rest of your life. Consider this humorous take on this problem from The Simpsons.
It’s easier for you to spend money on things you want instead of investing more in your retirement account because a lack of retirement savings is a problem for future you. Changing your retirement investing habits is more about mindset than discipline. You have to make a connection with your future self so that you are no longer strangers. Once you feel love and compassion for your future self, it will be easier to make better long-term decisions.
Connecting with Your Future Self
The first step in developing a healthier retirement mindset is to spend time thinking about your future. Imagine what you want your life to be like in five, ten, and twenty-five years in the future. Be as specific as possible. Where are you working? What is your house like? How do you spend your leisure time? If imagining the future is difficult, try answering the above questions in a journal. Often writing will open up different connections in your brain, making it easier to access your imagination. Next, imagine what your life will be like in the future if you continue with all of the habits you currently have. This may be uncomfortable, but it is critical.
If you eat the same way, exercise the same amount, and have the same financial habits in five, ten, and twenty-five years, how will your life look? Is this future much different from the ideal future you first imagined?
We all have some bad habits. This exercise will help you to connect the consequences of your habits to your future. It helps to make your future self a real person.
Cultivating a Retirement Mindset
Once you have started thinking about the future, you are ready to begin cultivating a retirement mindset. You now need to review your basic financial health and habits. Do you have a savings account? How much are you investing in your 401(k)? What are your spending habits like? Each time you have to make a financial decision, you need to stop and take time to imagine how that decision will affect you in the future. At first, it may be easiest to ask how will this decision affect me tomorrow or next month. But, as you get better at thinking about the future, you need to ask things like “Will this decision leave me better off or worse off in ten years?”
The more you think about your future, the easier it will be to develop love and compassion for your future self. The more you care about who you will be, the easier it will be to make good long-term decisions. You will find it easier to prioritize savings and investing for retirement—not because it’s the right thing to do, but because you care too much about your future to sabotage it for short-term pleasure. Talk to an OmniStar Advisor today about your current strategies and how you can change your mindset to benefit your future self.
