It was early July 2006, and my wife and my infant son and I were traveling to Minnesota for a camping trip. We had just begun our financial turnaround and, instead of going on the expensive vacations that had filled the summers of the early years of our marriage, we were simply driving a few hours north to visit family and do some super-inexpensive camping in a public park.
That day, we listened to a radio program that really influenced my thinking over the last decade or so. It was an episode of NPR's Talk of the Nation featuring Daniel Gilbert as a guest for one segment, in which he discussed how our brains are wired to consider and respond to short term threats and problems and give a lot less importance in the moment to the long term.
Here's that very episode, if you want to listen to it or read the transcript. I think this is the real core of the segment:
[Host Neil] CONAN: As you point out in your piece, our brains are exquisitely tuned to, if we see a baseball coming at our head, get out of the way.
Prof. [Daniel] GILBERT: Exactly so. So that's one of the features of climate change that makes it such an insidious threat, is that it's long-term. It's not something that threatens us this afternoon, but rather something that threatens us in the ensuing decades. Human beings are very good at getting out of the way of a speeding baseball. Godzilla comes running down the street, we know to run the other way. We're very good at clear and present danger, like every mammal is. That's why we've survived as long as we have.
But we've learned a new trick in the last couple of million years - at least we've kind of learned it. Our brains, unlike the brains of almost every other species, are prepared to treat the future as if it were the present. We can look ahead to our retirements or to a dental appointment, and we can take action today to save for retirement or to floss so that we don't get bad news six months down the line. But we're just learning this trick. It's really a very new adaptation in the animal kingdom and we don't do it all that well. We don't respond to long-term threats with nearly as much vigor and venom as we do to clear and present dangers.
Gilbert's point is simple: Humans, just like many animals, are really good at identifying short-term dangers and challenges, and we're pretty good at avoiding them. At the same time, humans have a fairly weak but still present ability to place ourselves in the future and think about that future and how it will impact us, but those thoughts are minor and weak compared to impulses in the present and very near future.
In other words, most people look at their jobs most of the time in terms of getting through it to enjoy the weekend. We do have occasional long-term thoughts about our job and where we're headed, but those thoughts are pretty minor and are usually drowned out by the short term.
It doesn't take a genius to see how this applies to personal finance.
The concepts of personal finance aren't hard. You spend less than you earn and do something productive with the difference. Do that over and over again, each pay period, and you'll wind up in a good place. Everything else is just details on top of that core point.
The problem is that there's usually no life-or-death need to do this in the short term. If a person's bills are paid and they have enough money in their pocket or breathing room on their credit card to get to the next payday... why think beyond that? Why think beyond the weekend or the next paycheck?
Most of us do think beyond that, at least a little, but that thinking is often nebulous, and it rarely results in any kind of real action that might actually impact that long-term path.
Sound familiar? It's exactly how most of us work in most aspects of our lives. We respond to the hot flame, not the gradual change. It's how most people handle finances. It's how most people handle their health. It's how most people handle their relationships. It's how most people handle their time.
If you step back, it's easy to see how it costs us tons of money. Almost every unnecessary use of our money comes from a short-term impulse. We see something and, without really thinking it through, we buy it. At the same time, we're aware of long-term expenses that are coming down the road - a vehicle replacement, retirement, and so on - but most of us don't save for those goals at all.
How does a person change that natural tendency to think about the short term, then?
There's one simple truth I've figured out about long-term thinking. Long-term thinking is like a muscle: the more you use it, the more natural it becomes to rely on it and use it in the course of your day to day life.
It's not like a light switch goes off one day and you become this mega-organized long-term thinker. That's never happened for me. Instead, what happened is that, over time, I gradually became more of a long-term thinker because I made myself think concrete and specific long-term thoughts as often as possible.
To put it in another way, parts of my daily routine require long-term thinking, and because I'm doing long-term thinking every day, it just becomes more natural to think of all of my life in that way.
How does a person with an ordinary life do that? Here are some strategies that really work well for me.
Every month or two, make a detailed picture of your life at some point in the future.
What do you want your life to realistically look like in five years? Ten years? Twenty years?
It seems like a simple question, one that most of us daydream about fairly often, but the difference between this and daydreaming is that you're sitting down and sketching out, in as much detail as possible, the realistic but positive vision of the future that you have for yourself rather than just happy glimpses of what might happen.
I usually take about an hour for this, and I do it once a month or so. I start by choosing a time frame - five years, 10 years, 20 years - and then I go through each of the spheres in my life and figure out what things look like regarding that sphere.
- Physical - How healthy is my body? Am I overweight? Am I reasonably fit for my age? What have I accomplished in this area?
- Intellectual - What new ideas have I mastered? What skills have I learned? What have I accomplished in this area?
- Spiritual/Philosophical - Have I thought about or had some insight into the purpose of my life? What have I accomplished in this area?
- Marital - How is my relationship with Sarah? Is it stronger than it is right now? What have I accomplished in this area?
- Parental - How is my relationship with each of my children? Did it develop into a healthy relationship between adults? What have I accomplished in this area?
- Social - What kind of social relationships do I have? Do I have strong ones with my current friends? Did I build new ones? What have I accomplished in this area?
- Professional - What have I done in my career? Did I successfully retire? What did I achieve? What have I accomplished in this area?
- Financial - Am I financially secure? Am I able to retire, or close to it? What have I accomplished in this area?
- Avocational - What other major initiatives have I started in my life? What else have I done? What have I accomplished in this area?
- Other Areas - Is there anything else I want to consider about my life at that point in time, like where I'll be living?
I think about all of those questions, and some of the obvious related questions to each one, and come up with a concrete answer for where I'd like my life to be at the point in time I'm thinking about. I aim for "positive but realistic" with these visions. What could I realistically achieve?
Usually, from there, I start making some plans for the near future. What do I need to do to make that life happen?
I usually write all of this out by hand. I sit down with a notebook and dig through these questions carefully, writing out my answers and other thoughts along the way.
I find that the simple process if thinking through this carefully hones my mind to naturally think about the future in realistic detail, and it becomes a type of thinking that my mind naturally leaps to. This is particularly true in the next few days after I do this exercise.
At the start of each day, think of one significant thing you can do today that will make your life better a year from now and make that a top priority.
This is part of my morning routine. I wake up and think to myself, "What thing that's outside of my normal routine could I do today that would have some sort of great benefit down the road in at least a year?"
Seed #1 – Help someone with a simple errand.
Seed #2 – Help someone move.
Seed #3 – When you see someone struggling, offer to just listen.
Seed #4 – Take care of a parent’s child or someone’s pet when that person is facing a true emergency.
Seed #5 – Sign up for volunteer work.
Seed #6 – Call someone you love and make the conversation entirely about them, by listening and asking questions rather than talking about yourself and your feelings and situation.
Seed #7 – Check in consistently on a friend or loved one who you know is struggling.
Seed #8 – Step in to take over household chores during emergencies and personal crises.
Seed #9 – Give a strong, positive personal testimonial or reference about someone else.
Seed #10 – Offer to review someone’s work before they submit it and review it carefully and thoughtfully.
I list 15 more in the article.
Simply put, seeds I planted long ago, with no expectation of anything in return other than the hope that someday it might be paid forward to someone, have consistently lifted my life personally, financially, professionally, and spiritually, and thus I put consistent effort into planting more, every single day.
Throughout the day, I keep my eyes open for spontaneous opportunities to do these kinds of things. What can I do to make the future better? I don't worry about what I might get in return for a little effort or a small expense. I just do those things and assume that good things will eventually happen as a result.
Strive to make the things you enjoy in the short term match up with the things you want in the long term.
In other words, try to make as many of the things you do every day be in alignment with the big things you want out of life.
For example, let's say you want to be financially successful, but you find yourself spending a lot of money in unnecessary ways that you often forget about completely once you've done it. Your focus here should be finding some enjoyable daily routines that take you away from spending situations. Just start tinkering with your daily routine and try to nudge it away from situations where you might spend money as much as possible. Try to find other things to do to fill those times where you'd spend money serendipitously.
For me, one really effective strategy was to alter my commute. I also started making cold brew coffee in the fridge so that I could just pour a great cup in the morning (and warm it up if I so wished) rather than hitting a coffee shop. I tried not to take away the little joys, but find ways to do them in a less expensive way or to find other less expensive replacements.
Similarly, let's say you want to be in better physical shape, but you don't really like "exercise" and many of your hobbies are sedentary. The trick here is to just find physically active things to do that you enjoy and just do them.
Try lots of stuff. Go on walks. Do some gardening. Join a martial arts class or some other fitness class for beginners. Just try different things until you find something you enjoy that clicks with you, then stick with it and make it a normal part of your daily routine.
For me, I discovered that I enjoyed walking, then I started taking a taekwondo class which really clicked with me, and it's provided a great new motivation for me to do bodyweight exercises and stretching at home.
If you want to lose weight, just seek out somewhat lower calorie foods that you really like and make those a bigger part of your diet.
If you want career success, consciously set aside a little time each day to do something that stretches your skills or teaches you a new skill, and aim to get involved with real projects at work.
If you want to be an involved pillar of the community, just start going to meetings of local civic groups or city government and stick with the ones that click.
The key is this: find things to fill your day that you enjoy right now that also have a long-term benefit or lead to a long term result that you actually want. Start analyzing your day through that lens constantly, and you'll find that before long it starts to become natural.
Use your spare time to think about very specific elements of your future.
Whenever I'm driving somewhere, I usually spend that time reflecting on my life. Those reflections take on two forms - an "after action review" where I think through something I recently did and whether it was the best thing to do or what I could have done better, or the more relevant thing, I think about some specific element of my future, what I really want it to look like, and how I could possibly get there.
For example, something I want to do in the future with my family is to go on at least two international family vacations, one to Europe and one to Asia, and perhaps one or two more to other continents if it can work out, before my children get too old to want to go on a family vacation with us. It seems like a nice daydream, but I genuinely want it to be a real thing, one that doesn't damage our finances.
So, how can I make it happen?
Should I start saving now? Should I consciously take on an extra project solely to pay for these trips? Should we do these fairly shoestring, or fairly expensive? Long or short? What years? When would the children be of the right age to get the most value out of such a trip? Should we consider travel to other areas?
I start hammering out details of things I might want to do way down the road and figure out what's feasible, what isn't, and what I need to start doing now to make it realistic.
What these little practices do is nudge me to think in a concrete and realistic way about my long-term future. This has a bunch of benefits.
First, I actually make good future plans when I think this way. I figure out what I actually want in my future and assemble a good plan for getting it.
Second, by thinking often about the future in a routine way, I begin to make long term thinking a normal part of my thinking process. I find that when situations come up, the long term impact of something becomes a very natural part of my thought process, altering my decision in the moment. This is not something I did when I was in dire financial straits.
Third, I sometimes feel like a good future naturally occurs since I started thinking this way. Many, many things that I wanted for the future have come to pass since I started really incorporating these strategies into my life. It's not some sort of secret mysticism, but simply the fact that I do more things naturally that nudge these things into being because I'm thinking about them a lot.
Finally, I'm very happy with my day to day life because I can feel the short term perks and have an ongoing sense of the long-term benefits. I rarely feel like what I'm doing today is damaging my long-term future.
Added together, these benefits make the time invested in thinking about the future pay off in spades. It's well worth your time to think about the future, plan for that future, and make changes to nudge that future into being, even if that future doesn't turn out quite right. All of the steps you took up to that point are still beneficial.