Stick with a long-term savings plan in an instant gratification world
Our brains are hardwired to prioritize instant gratification over long-term goals.1 This short-term thinking should be apparent to anyone who’s had to choose between sleeping in versus exercise or dessert versus a diet.
While many of us strive to think and plan for the long term, it’s often much easier said than done. We tend to think — and act — with a short-term focus, ignoring the long-term consequences of our actions. Sixty-one percent of financially well people say they’re good at setting up a long-term plan and sticking to it, which helps save for retirement, buying a house, or any number of financial plans or life goals.2 There are a few things you can do to help think and plan for the long term, especially financial planning.
Setting goals
When we’re stuck in day-to-day to-dos, we can easily lose sight of the things we want to accomplish over the long term. It’s great if you can check the little things off your list. But how often do you focus on your major life goals?
Here’s one tip to help shift your thinking from the short term to the long term: Ask yourself, “What do I want to accomplish in the next three years?” Don’t limit yourself to goals that are strictly financial. A goal could be anything from “open a business” to “own a classic car” to “tour Europe.”
This can help you identify what is most important to you. Mapping your goals can be simultaneously clarifying and motivating, which sets you up for the next step.
Protecting the most important things
Short-term thinking can also lead us to lose sight of critical events that could severely impact our lives. To identify these events, ask yourself: “What is the biggest thing I have to lose today?” Stop for a moment to think about that. What if you or your partner were unable to work?
As humans, we all tend to think we have more control over our lives than we really do. That’s one reason why we often ignore the possibility of negative events, like unexpected death or disability, happening to us or our loved ones — even though the consequences can be dire.
Ensuring that you and your family are fully protected should always be your first long-term financial consideration. Life insurance, for example, will help protect your family in the case of your death, while disability insurance can help make up for lost earnings if you’re too sick or injured to work.
How much protection is enough? Well, how much do you expect to earn before you retire? That’s the amount you should consider protecting. Use this calculator to see whether you're on target, pretty close, or have veered off course.
Saving for the long haul
Many of us are tempted to jump on a hot stock or market sector. Why is that? It’s exciting, if not addictive, to incessantly check the ticker and watch a hot stock climb.
But saving may be the better long-term play. It can be a tough concept to get a handle on and may not have the same emotional appeal of short-term investing. But a rate of savings can be more lucrative than a rate of return on high-stakes investments — particularly when you’re working toward a specific long-term savings goal like college or retirement.
To get your savings in gear, start by trying to put away 15-20 percent of your income. Tip: Use direct deposit to your savings account to help maintain discipline, and check the account regularly, say quarterly or yearly. What’s more, adhering to a consistent rate of savings helps you avoid taking too much risk with your money.
In fact, the ability to save over the long term is of far more consequence to your financial health than an investment’s rate of return.3 When people fail to save, and when they take inappropriate risk, they may have to scramble to start putting away money for retirement later in life. Aim to save an amount equal to your annual salary. This provides financial confidence for emergencies and future goals.
By taking a long-term view, you can make better decisions that may benefit you both now and in the future. Setting goals, protecting your earning power, and saving diligently can help get you both thinking and acting with the long-term in mind.
Disclaimer:
1 Amy Wolf, The Psychology of Setting Goals, University of Delaware Department of Psychological & Brain Sciences, January 2, 2025 https://www.udel.edu/udaily/2024/january/psychology-goals-habits-new-years-resolutions/
2 Guardian’s 14th Annual Workplace Benefits Study, 2025
3 Saving vs. investing: How are they different and which is better?, Bankrate, June 30, 2025 , https://www.bankrate.com/investing/saving-vs-investing/
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Material discussed is meant for general informational purposes only and is not to be construed as tax, legal, or investment advice. Although the information has been gathered from sources believed to be reliable, please note that individual situations can vary. Therefore, the information should be relied upon only when coordinated with individual professional advice.
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