Developing Future Mindedness in Students

Oct 06, 2017
Employment, NGPF Fellows, Behavioral Finance, Featured Teachers, Tips for Teachers, Teaching Strategies

Credit to NGPF Fellow, Barbara O'Neill for the following post:

According to research by Sarah Newcomb, a behavioral economist at Morningstar, people who focus on the future and feel that they create their own financial destiny tend to save more than others for retirement and other financial goals. When people focus on the future, they tend to be less impulsive (e.g., spending habits), regardless of their level of financial literacy. In other words, time orientation is a key factor in financial success. When people discount the future, they exhibit less patient behavior, which hurts them financially.

Newcomb found that the strongest predictor of good financial decisions is not financial literacy but, rather, a focus on the future. High levels of impulsiveness and materialism, on the other hand, were associated with poor financial decision-making. In addition, Newcomb’s research found that “power is happiness.” Empowered people are financially happier than others. Conversely, people who don’t feel in control of their personal finances have been found to exhibit negative emotions about their financial status up to those earning a six-figure income.

Newcomb’s research, which is summarized in her book, Loaded, has found that, the farther away something is in the future, the less people care about it. The secret to fostering future-mindedness by yourself and others is to trick your brain to think that “the far away is close.” When this happens, people care more about the future because the “Here and Now” is clear and intense while the “There and Later” is vague, abstract, and unemotional. Dr. Newcomb explained this in detail on a recent podcast with NGPF founder Tim Ranzetta.

So, knowing what we know about the importance of future-mindedness as a factor in achieving financial success, how do we foster this trait in students, particularly those that come from families that live “paycheck to paycheck?” I posed this question to over 100 New Jersey teachers this past summer at Financial Education Boot Camp and here is what they recommended:

  • Avoid the “F Word” (Future)- Planning far ahead with respect to personal finances (and life in general) is a foreign concept for many people who live day-to-day and struggle to make ends meet. In addition, the word “future” sounds scary or unrealistic or both. Instead of focusing on arbitrary points in time, like five or 10 years ahead, use the words “now” and “later.” “Later” is less intimidating a word than “future” because it can be three days from now or next month or however people self-define it.


  • Stress Positive Habits Instead of Goals- Yes, we’ve all taught SMART financial goals forever (e.g., “I will save $4,000 for a car in two years”), but maybe it’s time to take a step back and focus, instead, on small positive daily habits and, even better, systems (i.e., processes that people follow) to sustain those habits. Habits aren’t temporary like goals are and they keep students’ focus on daily action steps rather than some far-away ending date. A simple example is saving $1 per day, plus loose change, in a jar to accumulate about $50 per month. Another good financial habit for students is skipping something that they previously spent money on.


  • Provide Opportunities to Succeed- An example is a savings challenge. Perhaps prizes and social media posts can be provided as an extra incentive to participate. Two good challenges for students are the 30-Day $100 Savings Challenge and the 15-Week Savings Challenge, which comes in two versions: Basic ($300 of savings) and Hard Core ($675 of savings). Savings challenges provide a structured roadmap to accumulate a certain dollar amount by a certain date. No matter how much students are able to set aside, any step forward is progress and success fosters that sense of control that was noted in Dr. Newcomb’s research findings.

In summary, if you want to change students’ financial lives, reframe the words “future” and “goals,” help them think ahead, and provide them with opportunities to succeed, which fosters a sense of control over their lives.  


Interested in learning more about Sarah Newcomb, listen to her conversation with Tim on the NGPF podcast here!

About the Author

Laura Matchett

After graduating with an education degree and spending 7 years in an elementary classroom, Laura made the switch to the non-profit world and loves interacting with students, educators and business professionals across the country. She is passionate about all students having access to high quality education and views personal finance education as one way to ‘level the playing field’. When Laura is not locating or creating high quality educational resources, you can find her mountain biking or searching for the best ramen in town!