Steadfast FinancesTime Perspectives: Why We Argue About Money

Time Perspectives: Why We Argue About Money

Filed in Behavioral Economics , Investor Psychology , Personal Finance 1 comments

There is a Greek proverb that says:

A society grows great when old men plant trees whose shade they know they shall never sit in.

As the proverb so eloquently suggests, it’s this type of time based philosophy that can make or break a society, as well as an individual’s or family’s personal finances. A failure of this type of forward thinking would, with a bit of imagination, then provide a suitable hypothesis of why many of us struggle with and/or argue about money, as well as, why once mighty global superpowers lost their stature as a dominant player on the geopolitical stage… our individual time perspective.

In the video below, Professor Philip Zimbardo, an award winning social psychologist well known for the “Stanford Prison Experiment” and many others, discusses how the variable of time and the subsets of the time variable (culture, religion, philosophy, geography, etc.) impacts how we humans struggle within our own minds and the world around us when it comes to our individual time perspective.


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After listening to the lecture (and very clever time lapse note taking), it’s a little difficult to believe that it’s that simple to identify why we argue and fight over money, or anything else for that matter, and many of our disagreements might be due to our perspective of time.

The idea that each of us prefers to dwell on yesterday, live for today (carpe diem!), or constantly sacrifice for a better tomorrow, can have such a profound influence on our behavior, is rather mind blowing, yet sounds like an ingeniously simple solution to many of everyday conflicts of interest.

Time Perspective Types

If you didn’t catch the six different time perspective personality types, here is a very brief description:

  1. Past Positive type. You choose to focus upon the nostalgic moments and good ol’ times. Past successes, family gatherings, scoring four touchdowns in a single game, and on and on. Problem is, you’re so caught up in the past you may not strive to do accomplish much in the future or it may make you so confident in your ability to succeed it makes you overconfident.
  2. Past Negative type. You choose to remember only the negative occurrences and failures of your past. This can lead to a lack of self confidence and a general malaise that prevents you from improving your current situation or you eventually suffer from the “you are your own worst critic” problem, so you’re better off never making the effort to improve your situation.
  3. Present Hedonistic type. You choose only pleasure and always avoid the pain. Tomorrow is a not a concern because life is supposed to be fun and leave the hard work, sweat, and tears to the other suckers. Obviously, if you’re borrowing tomorrow’s resources to use for today, you eventually run out of tomorrow’s resources and have to live a sub-hedonistic lifestyle until debts are repaid. (National Debt and Carbon Counting Clock anyone?)
  4. Present Fatalistic type. You choose to believe that fate, destiny, “the Gods” or “God”, has a predetermined pathway for you and it’s in your best interests to take a passive approach to everything you encounter. That may be a good thing if you like to “ride shotgun” but can also be an anxiety or depression filled life if you’re the one who likes to drive. In other words, a scenario where you’re not going to try to change your surroundings, just accept where you are and not do much to change it.
  5. Future Life Goal type. You choose to ignore temptation and invest your time in hard work, which results in a set of accomplishments to be admired to improve your (or the world) standing, as well as a safety net to fall back upon at a later date. These are the bridge builders and squirrels who save for the winter, but might also ignore the pleasures of today in the hopes of building the perception of the better tomorrow.
  6. Future Transcendental type. You choose to believe that life after death, will be an achievable goal based upon how you lived during the time of your physical life. Many religions or transcendental philosophies require some form of “good behavior” or “restriction of Earthly pleasures” during physical life, which means the sacrifices you are making today will be rewarded in after your physical death.

As you have probably figured out already, if you are too focused upon one time perspective type more than the others, you can do quite a bit of harm, not to mention positively or negatively influence those around you.

In fact, you’ve probably heard phrases like “you can’t live solely for your career or you’ll be miserable” or “you can’t live in the past or you’ll never have a future” countless times in everyday conversation. Which would suggest we have some concept of healthy doses of time perspectives, and the consequences of existing solely in just one of the six types. However, I doubt that many of us have had the insight to put such an academic spin or an ability to classify time perspectives so easily as the way Professor Zimbardo describes in his lecture.

Which Time Perspective Type Are You?

Knowing the type of person you are and knowing the type of events/goals you tend to focus upon, and now having the concept of time perspectives spelled out in such an obvious manner, which time perspective personality type are you?

One? Two? A diversified mix of all of the above?

If you have a better half, is he/she just like you and do you constantly see eye-to-eye on the subject of money? Or are you different time perspective types, and one of you has emerged as the dominant money manager and the other is simply along for the ride.

If you’re complete opposites, would you estimate that your differences of opinion are based upon, for example, one partner constantly looking ahead to the future while one is only concerned with living it up in the here and now? Doesn’t this sound vaguely like the tensions encountered between savers versus spenders?

As for me, I’m probably 50% Future Life Goal type (probably much more in my mid 20s) with a mix of Present Hedonist and Past Negative. I firmly believe that your mistakes make you who you are, but also, it’s necessary to have a sufficient set of goals to accomplish what you want in life while taking a few moments to enjoy what you’ve accomplished.

So perhaps our friend Ferris Bueller really did have it right…

Life moves pretty fast. If you don’t stop and look around once in a while… you could miss it.

Definitely a good philosophy to follow.

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Posted by CJ   @   13 June 2010 1 comments
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1 Comments

Comments
Jun 13, 2010
7:45 pm

Hey Matt – Great video find! I don’t know what I am but an optimist who goes with the flow.

Cheers,

Sam

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