Our AI writing assistant, WriteUp, can assist you in easily writing any text. Click here to experience its capabilities.

The Key To Making Good Financial Decisions—Connecting With Your ‘Future Self’

View Original View Raw

Summary

In this article, Tim Maurer discusses how connecting with our "future self" can help us make better financial decisions. He shares his own experience of becoming a father again at an older age and how it made him realize that he needed to take better care of himself and his family's financial future. He talks about how our connection to our future self can help us save more money and plan for the future. He also offers advice on how to stay on track and not overcorrect, such as automating savings, working with a financial advisor, and enjoying the present.

Q&As

What is the key to making good financial decisions?
The key to making good financial decisions is connecting with your 'future self'.

How did Hal Hershfield's new book, "Your Future Self," help Tim Maurer in making financial decisions?
Hal Hershfield's new book, "Your Future Self," helped Tim Maurer by providing insight into how our future perspective impacts our present and how to apply behavioral science in pursuit of the most effective financial planning.

What are some of the steps Tim Maurer took after picturing his future self?
After picturing his future self, Tim Maurer increased his 401(k) contribution, upgraded his health insurance, reached out to an attorney to accelerate the update to his estate planning documents, inquired about purchasing additional life insurance, and ran a calculation to determine how much he'd invest monthly in a new 529 education savings plan.

What is the "96% Problem" and how can financial advisors help?
The "96% Problem" is when people save so much money that they don't have enough left to enjoy the lifestyle their diligent saving was designed to support. Financial advisors can help by providing accountability and regular check-ins to ensure that clients are staying the course.

How can readers engaging with their future self to make better financial decisions?
Readers can engage with their future self to make better financial decisions by imagining their future selves in a given moment in time, automating their personal savings, retirement savings, bill pay, and charitable donations, and seeking help from a financial advisor to set and stay the course.

AI Comments

👍 This article offers excellent advice on how to maintain a connection with our future self in order to make good financial decisions. It provides a great insight into the importance of making sure our present actions are in line with our future goals.

👎 This article does not provide any concrete steps for how to make financial decisions that will benefit our future selves. It relies heavily on anecdotal evidence and the advice of one expert, which may not be applicable to all readers.

AI Discussion

Me: It's about making good financial decisions by connecting with your future self. The author shares his experience of how he was inspired to act immediately on behalf of his family's future after a vivid vision of himself attending his daughter's high school graduation 18 years from now.

Friend: That's really interesting. It makes sense that having a vision of the future can help us make better decisions in the present.

Me: Absolutely. The article also outlines four observations that the author discussed with the book's author, Hal Hershfield, to help us apply his wisdom and research to our own financial planning.

Friend: What are those observations?

Me: One of the observations is that we need to be aware that we often see our future self as a different person. This can make it difficult to save for the future. Another observation is that a better connection with our future self can lead to better “future self-care”, like saving for the future. The third is that we need help in staying the course, which is why it's important to automate our savings and have regular check-ins with a financial advisor. The fourth is that we can also over-correct and not enjoy the present enough.

Action items

Increase your 401(k) contribution.
Upgrade your health insurance.
Automate your personal savings, retirement savings, bill pay, and charitable donations.

Technical terms

RMD: Required Minimum Distribution. This is the minimum amount that must be withdrawn from a retirement account each year, starting at age 72.
QCD: Qualified Charitable Distribution. This is a type of withdrawal from an IRA that is made directly to a qualified charity and is excluded from the taxpayer’s income.
529 Education Savings Plan: A tax-advantaged savings plan designed to encourage saving for future education costs.
Estate Plan: A plan for the management and distribution of a person’s assets after death.
Will: A legal document that outlines how a person’s assets should be distributed after death.
Trust: A legal document that outlines how a person’s assets should be managed and distributed after death.
Hyperopia: Far-sightedness, both in vision and in psychological applications.