At the first Think Forward Summit last year, participants defined three areas where people experience challenges in their financial decision-making. These challenges gave birth to five projects, which participants were busy working on throughout the past year. This is an overview of the Future self-project group, their research and the practical solution being developed based on the research.
The future self
By Dimitris Mavridis and Stefan van Woelderen
You are not alone. A 2016 survey commissioned by ING showed that more than half of all people in Europe and elsewhere do not set clear financial goals. It is safe to say that many who do, don’t stick to them.
A diverse group of academics and practitioners, including the authors of this article, have taken up the challenge to systematically help people’s long-term planning and decision-making, in order to ensure future (financial) goals are set and (stay) achievable throughout their lives. So: how to live today and effectively plan for tomorrow.
The project, in three stages, is called ‘Future Self’. The practical solution the team develops will be founded on the insights that come from the research part of the project. Conversely, the data retrieved from the practical solution could benefit future research.
Visualisation is key
Your future self could help you make decisions on the basis of a visualisation.Visualisation of goals, suggested actions, impact of actions on long-term goals, progress towards achieving a set goal, and offering help or dialogue-based guidance and advice – e.g. via instant feedback based on data - to get people back on track if needed.
First an understanding of the variety of responses to major life events across the population is needed. For example a divorce, can open new positive opportunities for one individual, but it can be devastating for another. The financial consequences can differ sharply as a result of personality traits and differences in social and financial situations or outlooks. It is important to deeply understand this, because helping people in their decision-making requires a tailor-made approach, at least to a certain extent.
Moreover, life events that are normally not considered potentially impactful on long-term finances could have surprisingly big implications on spending patterns and therefore on long-term savings. For example, there is some evidence that gaining or losing weight, and the social consequences related to that, can be financially more impactful for some than well-known major life events such as giving birth or marriage.
Stage one of the Future Self project uses models from psychology and a household survey to understand evidence from the past (‘past self’), combine it with the current situation (‘current self’) and predict how that relates to a person’s ‘future self’.
Stage two will be about stimulating people to set goals and converting those goals into actions. We want to find out more to what extent visualisation and personalisation help or hinder people to set goals; and how that differs between the types of goals. This stage is also about helping individuals translate good intentions into action. Randomised controlled trials could for example be used to test whether specifying implementation intentions help people turn goals into actions.
Stage three will be about helping people to stay on path to reach their goals. On the research side this phase is about understanding the paths people need to take to reach their goals and to understand how a practical (planning) tool can help people stay on track to achieve their goals, also in case of (unexpected) major life events. How can we help people better manage the impact of potential life-changing events?
Do you find it hard to think about your future and plan for it? Where do you see yourself in 10, 20, 30 years? Once you have visualised this future self, do you know what will help you get there?
The future self practical solution helps you by visualising your goals and proposing short & long term actions, showing its impact and assisting you with daily decisions while visualising your progress. We’ll even help you get back on track if needed. You may for example want to own a house someday; our visual timeline will guide your decisions today so that you’ll stay on track & have the financial means in the future to make it happen.