A new survey has revealed that we are incapable of thinking beyond the immediate future. Even when we're saving for the future, our priorities are the kinds of things we want to be enjoying within the next 12 months.
And there are two massive areas it means we're missing out on.
We are savingThe initial findings looked like good news. Despite the massive pressures of the current economic environment, 61% of people managed to find something to put away on a regular basis.
However, on closer examination, we may be missing the point. The survey, by myvouchercodes.co.uk, asked people what their savings priorities were. By far the most popular answer was a holiday. Some 69% of people who are putting any money away at all have this particular goal in mind. This is followed fairly shortly by saving up for a particular gadget, at 63%. The top three is completed by a car.
Of course, it's great news that we're saving up for these things. It makes a great change from the boom years when these were exactly the sorts of things we would stick on a credit card without a second thought.
We are missing outWhen you look further down the list, the alarm bells start ringing. Only 9% of people were saving up for a mortgage deposit, and a tiny 3% were saving for their children's future.
And while you could argue that perhaps the particular respondents to the survey already had a mortgage, or didn't have any children, this isn't borne out by the figures. In fact, some 57% of the respondents were parents, and only 26% had a mortgage of their own already.
It means we're neglecting vital life-goals in favour of short-term treats. Pearson suggested: "It is important to prioritise what it is you are saving for. For example, is that new wardrobe full of clothes you are saving for really more important than a mortgage or your children's future?"
Why?Patrick Connolly, an adviser with AWD Chase de Vere, isn't surprised by the results. He says: "Many people see the short term goals immediately in front of them, but don't have a realistic picture of further ahead. It's easy to look ahead to your next summer holiday or even to a wedding or a car as your next financial step. What is easier to delay is the longer term savings, because people have no idea of what is coming or how much they need to save for it."
He added that despite the increased cost of a university education, for many people, saving for children has dropped down the list since the credit crunch. He explains; "In the current environment, most people are worried about their own needs first, and saving for children is considered a luxury they can come to later."
He said it was often only on taking advice that people recognised the need to simultaneously plan for the short term and for further in the future.
The top ten things we are saving for1. Holiday 69%
2. Certain gadget 63%
3. Car/vehicle 41%
4. Clothing 33%
5. Home improvements 24%
6. Wedding 16%
7. Start a family 11%
8. Present for someone 9%
9. Mortgage 9%
10. Children's future 3%