Future-self Nudge Works Even Better in Reverse

Starting with your future self and looking back to your current self increases likelihood of saving

A cornerstone to financial security is summoning the tenacity to forgo some spending today to have more savings later. 

It’s a struggle for many. 

Federal Reserve data shows that nearly 40% of adults don’t have $400 in cash to cover an unexpected expense, and a recent Fidelity analysis found that half of households are at risk of not having what they will need for a comfortable retirement.

One of the big headwinds is our tendency to lack a bond with our future self, often viewing that person as a stranger. It’s not necessarily easy to do smart things (save more today) for an abstract version of ourselves we don’t have big feels for.

A promising behavioral curative is to nudge us to connect more to our future selves. Prior research has shown that a mental time travel nudge spurs more retirement savings in younger adults and gets more people to sign up for a bank savings plan. 

To date, the mental time travel nudge has been framed as starting with your today self and thinking about your tomorrow self. 

The Going Home Effect in Action

Research published in Journal of Consumer Research shows that linear travel exercise in reverse, studying what happens when people are encouraged to start with their future self and then mentally travel back to their current self. Across 20 studies, including two large field experiments, Indiana University’s Katherine L. Christensen, UCLA Anderson’s Hal Hershfield and the University of Toronto’s Sam J. Maglio find that the future-self-to-present-self exercise is even more effective at promoting savings than the standard present-self-to-future-self approach.

The authors suggest the mechanism at work is related to the odd yet familiar sensation that it takes us less time to travel back to a known base (home) than it did for us to travel the same distance to our original destination, when that destination is new/unknown. 

It’s not that we’re anxious heading out into the unknown, but rather that returning home is more familiar/certain, which creates the sense of requiring less time to traverse the same distance. The researchers offer evidence that this “going home effect” translates to mental time travel. 

“Mentally traveling from the future to the present — rather than the present to the future — increases perceived similarity between selves across time by reducing the uncertainty of the destination self,” they write.

The Nuance in the Future-Self Nudge

In one lab study, participants were asked to compare their current self with their future 2027 self. Some participants were prompted to think this through from the vantage point that it is now 2027 (future back to present); others were given the more familiar time travel frame of starting in the present (2021 at the time of the experiment) and thinking about their 2027 self. 

Participants estimated how familiar their 2021 self was to their 2027 self, on a scale of 1 to 7. The future-to-present group reported more similarity (3.75 average) than the present-to-future group (3.15). A control group that was simply asked to compare their 2021 and 2027 selves, without a prompt about what year to start from, had an average score of 3.33. 

The researchers next applied this concept to a large field study involving more than 6,500 clients of a Swedish fintech investing and savings app, who had relatively low savings. Half of the clients received a push text message with the common present to future frame (“The year is 2019. Move forward to 2029. Save for 2029 you!”). The other half received the future-to-present frame. (“The year is 2029. Rewind back to 2019. Save for 2029 you!”). In the ensuing week, more than 14% of customers who got the future-to-present nudge signed up for a savings plan, compared with 12.1% of customers who received the present-to-future nudge.

Another field experiment moved stateside to see how this might play out among more than 24,000 people who had contacted the college-savings app UNest but had not yet completed the sign-up process that comes with a $10 bonus payment into their account. 

Because this field study focused on people who had not followed through on signing up, the researchers didn’t expect a large uptake. But here too, there was a more positive outcome among customers who received a prompt to start in the future. “The year is 2031, rewind back to 2021. Save now for college and get $10 on us,” was more effective than those prompted to start in 2021 and think about their 2031 self. The sign-up rate of 0.17% for the future-to-present frame, while not gangbusters, was indeed higher than the 0.04% rate for those given the present-to-future frame. 

Though modest in size, the result, along with the findings of the other experiments suggest an intriguing nuance to the effective future-self nudge. The direction we travel matters.