Inability to imagine future prevents us from saving up in the present: Study

WASHINGTON - A new study reveals that if we could imagine our future financial situation, we would be much more willing to save up money in the present.

“This willingness to forego money now and wait for future benefits is strongly affected by how connected we feel to our future self, who will ultimately benefit from the resources we save,” said Daniel M. Bartels (Columbia Business School) and Oleg Urminsky (University of Chicago).

Consumers have trouble feeling connected to their future selves, they said.

In one study, “When seniors were told that graduation would lead to major changes in identity, they reported feeling less connected to their future selves,” the authors wrote.

“Those thinking about changes in identity were also more impatient, choosing less-valuable gift certificates that would be available sooner over higher-valued gift certificates that required waiting a year.”

Another study asked people to evaluate their sense of connectedness and similarity to their future selves.

Three weeks later, they had to choose between smaller gift cards they could use right away or larger gift cards that would require waiting.

“Those who had felt more connected to their future selves then made more patient choices and were more willing to wait for a higher-valued gift card,” the authors wrote.

“Countering this tendency, by helping people recognize the enduring aspects of their personal identity, may hold the key to making people more patient and more willing to sacrifice, save, and invest for the future,” the authors concluded.

The study appears in the Journal of Consumer Research. (ANI)