Present Self vs. Future Self

Sarah F. Roach

Many people find it difficult to save money, and a growing body of research is aimed at making it easier. One finding has been that everyone has a subconscious “present” self and “future” self. Unfortunately, these two selves often have different motivations; moreover, they always have different amounts of influence, because the present self is, well, present, while the future self is not. To quote psychol­ogist Daniel Goldstein, “There’s nobody to stick up for the future self. It doesn’t even have a lawyer present.”

So how does anyone convince the present self to make decisions more aligned with the future self’s interests? One technique is the “commitment device,” a behavioral contract with yourself. Unfortunately, it’s easy to wiggle out of self-directed promises. Most people can readily come up with reasons why eating less, exercising more or saving part of each paycheck doesn’t really need to happen today. Put differently, the present self decides that the future self will take care of it. Catch-22!

Behavioral economist Wendy de la Rosa of Duke University suggests that to succeed, commitment devices require an environmental change. In her personal effort to reduce daily spending, for example, simply promising herself she’d cut back didn’t work, because nothing had changed in her spending environment. So she switched to using a preloaded debit card. When the money ran out, she had to either stop spending or go through the effort of reloading the card. This small obstacle, and the feedback it provided, helped her succeed.

Psychologist Goldstein and his colleagues have suggested that the present self may have trouble picturing the future. So they’ve developed virtual reality simulators to make it more real. One simulator shows participants 100 financial outcomes ranging from doing well in retirement to barely making ends meet. When a subject commits to a certain behavior on the simulator, such as monthly saving, some outcomes become less likely and disappear from the screen. With each decision, more outcomes disappear, until only one remains. Another simulator shows subjects what their future self will be able to buy as opposed to a numerical outcome. For example, when a participant elects an amount to save now, she can see what quality of housing her future self will be able to afford. Most subjects experienced some motivating joy when they saw the positive effect of certain decisions on their future.

Particularly interesting are psychologist Hal Hershfield’s studies in which participants look at aged versions of themselves—which John Brock wrote about last year. As John mentioned, people act more sympathetically toward future selves they can actually see. Well, to liven things up a bit, Goldstein and Hershfield have teamed up on subsequent studies that add emotional reactions to the present and future-self photos. For example, if a subject chooses to save instead of spend, the present self frowns while the future self smiles. If he opts to buy something instead, the opposite occurs.

Whatever ultimately gets people to take care of their future selves, the words of 19th century economist Nassau William Senior certainly remain true: “To abstain from the enjoyment which is in our power, or to seek distant rather than immediate results, are among the most painful exertions of the human will.”