Think Forward Initiative - Increasing saving behaviour | Deloitte


How can a "future selfie" save you a fortune?

Think Forward Initiative | Increasing Saving Behaviour

Think Forward Initiative is a multi-year movement that brings together a range of experts and researches to find out how and why we make financial choices. One of these researches is 'Increasing Saving Behaviour', conducted by Hal Hershfield and Daniel Goldstein, which indicates that one picture might help provide motivation for you to boost how much you save for retirement. This can ultimately lead to a more comfortable life for your “future self”. Read or download TFI's article below.

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"The battle between the present and the future self is an unequal battle. The present self takes action with strong arms. The future self is weak and distant. It has no advocate" - Daniel Goldstein

Think Forward Initiative

Age-progressed renderings

Many people fail to save what they will need for retirement. Research on excessive discounting of the future suggests that removing the lure of immediate rewards by precommitting to decisions or elaborating the value of future rewards can make decisions more future oriented. The research of 'Increasing Saving Behaviour Through Age-Progressed Renderings of The Future Self' does not deal with present and future rewards, but with present and future selves. The researchers propose that allowing people to interact with age-progressed renderings of themselves will cause them to allocate more resources to the future.

Download the TFI 'Best of Book' to read the full article.

Empathy gaps

The idea of the “future selfie” is explored by Hal Hershfield of New York University (and several co-authors). Their research indicated that people shown an avatar of themselves modified to look much older are likely to choose to save more for their future than people who are shown a non-aged avatar. In order to understand why this might improve saving rates, a look has been taken at the concept of “empathy gaps”.

Hot and cold decisions

Back in 1996, behavioural economist George Loewenstein wrote about the effect of visceral factors on decision making. There can be thought of two different states of being: a “hot state”, when we are emotional or our senses are aroused, versus a “cold state”, when we are dispassionate, satiated and at ease. The decisions we make in a hot state are often contra dictionary with those that we would make in a cold state. For example, if shopping after lunch (while in a cold state) one might pick up some lettuce and vegetables to make a salad for dinner, but by the time that person gets home after work - hungry and tired after a long day (hot state) - he or she wants nothing more than an easy take-away meal.

Strangers to ourselves

Follow-up research by Loewenstein and fellow behavioural economist Dan Ariely showed that our state does not only influence our desires, but we also underestimate how we might feel differently in these conditions. This underestimation of the change in our preferences – and therefore our decisions, which may have financial consequences – is called an “empathy gap”. Put another way, when in a cold state we find it hard to empathise with the person we become in a hot state. The concept of empathy gaps has been used to reflect on all sorts op topics, from medical decisions such as treating with pain medication to punishment for school bullying. Of course, as the experience of shopping when hungry demonstrates, this empathy gap can also be applied to understanding financial decisions.

Bridging the emotional gap

That unflattering photo or an artificially aged portrait might make us cringe. But on the positive side, they seem to help us imagine the future consequences of the decisions we’re making today. They can narrow the empathy gap – or improve the emotional connection – between our future selves and our present selves, nudging us towards saving more now for the benefit of our long-term financial health.
So the next time you are deciding on pension contributions, consider both the current obligations of your present self and how you want to live when you are retired. In the absence of an ageing app to doctor up your own “future selfie”, spend some time with a photo of your parent or grandparent. It might change your financial behaviour – now and in the future.

Want to know more about the Think Forward Initiative?

Would you like to stay up-to-date and informed on the Think Forward Initiative. Please join the network via the Think Forward website or contact Peter van Loon at Join the discussion @ThinkForward.

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