Recently, my husband and I sat down to map out our savings plan for three months of travel at the end of next year.
We figured out how to live off of one of our salaries right now, and put the rest into savings—both for retirement and toward a special account we opened and labeled “Chris and Cheryl Go Traveling.”
I have to tell you, it’s never been easier for me to sock away money than it is right now, when I’m imagining myself climbing to the top of Machu Picchu next year or staring at the photo of the Galapagos Islands that I printed and hung near my desk.
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And, it turns out, neuroscience may be on my side: According to researchers at the University of Pennsylvania, people whose brains show added activity when they’re imagining the future also seem to make better financial choices.
“We study people choosing between immediate and delayed monetary rewards,” says Joe Kable, a specialist in the field of neuroeconomics at the University of Pennsylvania. “Previously, people have emphasized the importance of tamping down the desire for immediate gratification. Our work highlights the flip side of this, which is the importance of enhancing one’s desire for delayed rewards—and we think imagination can play an important part in this process.”
Kable isn’t the only one studying the correlation between visualization and money. We spoke to some of the leading researchers in the field to scope out ways you visualize your way to a prettier financial picture.
What Would Your Future Self Want You to Do?
Over at New York University’s Stern School of Business, Hal Hershfield, a psychologist and marketing professor, is studying the idea of how getting acquainted with your future self can help you save more today.
As he told CNBC, most people treat their future selves as strangers, so putting money into a retirement account for said stranger doesn’t exactly feel personal to them.
“What our research has been showing is that if people think of their future selves as a different person altogether … then that has deep implications,” he said. “If you can somehow boost their connectedness with that person in the future, they save more.”
In fact, research by Hershfield and his colleagues found that when computer simulators were used to show people what they might look like 20 or 30 years from now, participants who were shown the photos allocated 6% of their hypothetical paycheck to retirement, while those who didn't see "future self" photos only saved about 4%—a seismic difference since the earnings on your retirement savings compound over time.
Our brains are wired so it's easier for us to make decisions when we attach a visual aid to them.
Russell James, a neuroscientist at Texas Tech University, teaches his students that 70% of our brains are geared toward emotional and visual stimulation, while the rational side amounts to more like 20%. Therefore, our brains are wired so it's easier for us to make decisions when we attach a visual aid to them, he says.
Which is why my tacked-up photos of Machu Picchu might really help get me there.
Your Brain on Pinterest
If visualizing the reality we’d like to achieve really does play a factor in our ability to make smart financial decisions, how can we use that knowledge to make the most of the connection?
“'A picture is worth a thousand words,’” says Steven B. Smith, CEO of Money4Life Coaching, a personal coaching company designed to help people stop living paycheck to paycheck. “I am sure most of us have heard this saying, and I believe this old proverb is still true today, especially when we talk about money.”
Luckily for us, there’s a wildly popular website that’s geared toward helping us use pictures as inspiration for our daily lives. Perhaps you’ve heard of it—it’s called Pinterest.
“Pinterest has a great potential to break through the noise by simply appealing to our visual senses,” Smith says.
RELATED: 5 Ways Rich People Think Differently
Here are a few specific ways he suggests using the site to help you reach your financial goals. In fact, LearnVest has several boards designed to help you save on everything from parenting to wedding planning to getting dressed for work. Plus, one of LearnVest's most popular boards deals with financial inspiration.
Lowering grocery bills: You don’t have to be an extreme couponer to save money at the grocery store, says Smith. Instead, head to Pinterest, and type in “save on groceries." “You can find anything from full month’s menus that will feed a family of four to crockpot recipes,” he says. If that’s not enough, a search for "grocery apps" will provide you with a collage of smartphone apps that aim to help you find the best deals on food items. (LearnVest also offers boards for affordable eats and healthy food.)
Saving on home projects: As any Pinterest devotee will know, the site is full of images and videos, known as pins—dedicated to D.I.Y. projects, crafts and home décor ideas that will help you renovate or just spruce up without going over budget. (Here's LearnVest's board of 720 money-saving D.I.Y. ideas.)
Getting fit without the gym fees: If the cost of a gym membership isn’t in your budget, use Pinterest to help get in shape instead. “The ‘Health and Fitness’ section of the site could help you save hundreds of dollars on gym fees while offering you great ideas on how to do quick workouts at home," says Smith.
Finally, he also likes Pinterest as a money-saving medium because of how it helps us practice self-control.
“Its personalized boards create a sense of having our own shopping carts that we can fill up to our heart’s content, but without having to immediately make a decision to buy,” he says. “It’s a way for us to ‘distract’ ourselves, without having the cash register right there to make the final purchase.”