How I Switched to Long Term Thinking

Over the past five or six years since my financial turnaround started, the single most significant change that has happened to how I view the world is a switch to what I call “long term thinking.” Simply put, I evaluate most of my life choices primarily through a long-term lens.

In other words, when I look at things like how I spend my money, how I spend my time, who I choose to interact with, and so on, I’m often not thinking as much about immediate pleasure but how my choices will impact my life in, say, five years.

Let me give you a few examples of what I’m talking about.

Most mornings, my children wake me up and I’m pretty groggy at first. After a minute or two of swimming up out of a sleep state and into a basic comprehension of the world around me, I’m faced with a choice. I could either shamble along in a half-awake state, mumbling incoherently at my children, or I can will myself to be energetic and help them get ready in the morning. The former is far more pleasing in the short term, but I often find myself jumping up and down several times and splashing my face with cold water so I can get going immediately and get right on the task of making sure the kids are dressed, talking to them about their day, and making sure they have a great breakfast on the table. That little bit of discomfort each morning will lead to more well-balanced children in several years.

I stop by a local boardgaming night and try out a new game that I really enjoy. The store has it on sale for $40. I’m faced with a choice. If I buy it, I’ll probably play it a few times with my friends. If I don’t buy it, it won’t prevent me from spending an evening playing games with my friends. So, the upside of buying this isn’t a new social event. It’s just more stuff on my shelf. On the other hand, another $40 in my bank account means an easier road to financial freedom.

Buying a cup of coffee from Starbucks in the morning might give me a quick jolt of energy. Of course, if I do that, then I become just a bit more used to having that jolt in the morning, making me more reliant on coffee instead of a glass of water in the morning. A consistent diet of Starbucks isn’t really a good thing for my long term health, either. Not drinking that cup of Starbucks leads to a trend of less spending on morning coffee and better health. I’ll leave it as a rare treat.

This is a hard switch to make. Our immediate wants and desires scream with urgency next to longer-term concerns, and it is incredibly easy to just let the short-term thinking rule the day. I used several tactics to start making the transition (and I’ll be the first to admit that I’m not 100% at thinknig this way).

I spent time thinking about my common decisions away from the moment where I made those decisions. Thinking about things in the heat of the moment often leads a person to make the short-term beneficial decision rather than the long-term beneficial decision.

Thus, I started spending some time each day thinking about the decisions I made that day, particularly ones I would often see myself repeating. Outside of the moment, I’d look at the short term benefits of my options as well as the long term benefits and I’d decide independently what the best long-term choice was.

I spent time figuring out exactly what I wanted from my future. I often mention drawing a five year sketch of your life and a ten year sketch and maybe even a twenty year sketch. What I mean by that is simply laying out what things you’d like to have in your life at that point. Obviously, those things won’t perfectly come to pass, as life often hands us unexpected things.

The reason for doing this is to figure out what things you can control to make those dreams come true. I can control the money I spend. I can control the food I eat. I can control the time I spend. I can control what I read and what I learn. What choices can I make in those contexts that lead to the five year sketch of the life I want?

I spent less time with people who would tempt me to make short-term decisions. People who constantly encourage you to buy things you don’t need are ones that will cause you to constantly sacrifice your future for your present. I spent a lot of years hanging out with people who did just that and it led me almost into the poorhouse.

My current circle of friends are almost all rather frugal. We have potluck dinners for our social engagements and usually wind up playing board games. We trade a lot of tips on saving money and sometimes clip coupons for each other and send each other deals. We take pride in our good financial moves – buying land is far valued over buying a new car, for example. These are friends that will encourage you to think for the long term.

I set up situations where the beneficial short term choice and the beneficial long term choice were the same choice. An easy example of this is throwing out all of the unhealthy snacks in your house so that you can only choose among healthy ones, but you can do the same thing with lots of different aspects of your life.

For example, you can choose a commute that doesn’t take you by temptations to spend money or eat unhealthily. You can delete distracting computer games from your computer. You can unplug the internet router for a while, making it much more difficult to get online (and instead easier to get other things done). If you make the path of least resistance one that helps your long term future, you’re setting up a great life.

I accepted some short-term choices as splurges. Splurges turned from just spending money into making choices for the short term. So, for example, playing a computer game is often a splurge for me. It’s fun in the short term, but has virtually no positive impact in the long term.

The key is that I recognize that it’s a splurge. It’s something that I know isn’t the best choice, but it’s okay to do every once in a while. It’s part of the spice of life, and I savor those splurges.

Good luck!

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  1. Maureen says:

    You avoid people who might tempt you to spend, rearrange your commute to avoid passing places that lure you in to spend, yet you go to a store and try out board games? Seems inconsistent to me.

  2. Other Jonathan says:

    I really like this post – long term thinking is a great way of describing my own thoughts on money as well. My cousin got a little R/C helicopter for Christmas. It’s a lot of fun, would be enjoyable to learn to control well, and costs $37 online. I’m tempted to buy it. But, a year ago I “splurged” on a little R/C car at a mall kiosk because I rarely splurge (and I recognized it as such then). However, a week later and it’s sitting in the closet, and hasn’t been touched since, and every time I look at it I think “what a waste of money!” (and I definitely never got my money’s worth of enjoyment out of it). So I always think about how I’ll feel about that purchase after the initial thrill has worn off, and then consider whether the short- and long-term satisfaction is enough to justify the purchase.

  3. Tizzle says:

    My first thought on this was how to practice this idea? I am currently in the middle of a non-spending spree because I need the money for a vacation coming up. It’s hard, because I don’t spend all that much in the first place, and so the short-term sacrifice means I spend less time with friends. Except that I CAN go to the bar with them, and only have one beer. This is kinda difficult for me, but I’m working on it. It’s easy to save a windfall (say $200 or up), but hard to save $5 at a time, in this long-term thinking.

  4. Kai says:

    Print out a photo of your vacation destination. Every time you think you can afford another beer or whatever else, take a look at that photo and decide whether you’d rather have the vacation or the beer. If you decide you’d rather have the beer every so often, no worries. But every time you decide you’d rather have the vacation, take the money you would have spent on the beer, and tuck it in behind the picture. Then start storing it somewhere else – in a jar to be deposited into your vacation savings whenever you amass a chunk or something else that works for you.
    Then when you get to that vacation, enjoy the hell out of it.

  5. Tizzle says:

    Good advice, Kai. I’m set on the vacation (2 days, yay sun!), but I’m gonna try that for my weight loss challenge – I know it’s cliché at this time of year, but in a twist, a group of us are putting money into a pot and the biggest loser will take it all.

  6. Jen says:

    I always think about my spending and whilst I consider myself frugal, I still have a soft spot for something things and I possibly splurge more than what I should. Tizzle’s comment was spot on… it’s easy to save a windfall; it’s those small purchases and irrelevant spending that add up. At times I feel that reaching that level of control over some forms of spending (say not going for coffee or lunch outside of the usual stuff I prepare at home) would have a significant impact on my social life. Sounds crazy but I work abroad and most of my friends are from work and in my occupation, people seem to be quite relaxed about parting with their hard-earned cash! I’ve had conversations with others about this and it seems that some people are convinced that saving some money, but an amount that allows them not to compromise on those other treats and purchases, is the way forward. That’s definitely not the way I see my long-term financial future but it does make my present a bit awkward sometimes.

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