FutureTree

The Psychology of ‘What If’: Why Seeing Multiple Futures Changes How We Decide

Image

When it comes to money, most of us want certainty. We want to know that if we save a certain amount, invest in the right way, or buy at the right time, everything will work out. But life rarely gives us certainty. Instead, it gives us probabilities, scenarios, and countless “what ifs.”

The good news is that uncertainty isn’t only a source of stress — it’s also a source of power. By learning to embrace “what if” thinking, and by visualising multiple possible futures, we can make better, calmer, and more confident decisions. In this article, we’ll explore the psychology behind scenario thinking, why it matters for financial decisions, and how tools like FutureTree are designed to make it practical.

The Limits of Linear Thinking

Traditional decision-making often follows a linear model: identify the goal, create a plan, and execute. In personal finance, this shows up as:

While useful, this approach assumes stability. It doesn’t account for uncertainty, variability, or the fact that small changes today can ripple out into dramatically different outcomes tomorrow.

Psychologists have shown that humans are poor at linear projections over long time horizons. We underestimate compounding, ignore volatility, and focus too much on the immediate. This leaves us vulnerable when the unexpected inevitably happens.

Counterfactual Thinking: Our Natural “What If” Engine

Humans already ask “what if” all the time. Psychologists call this counterfactual thinking — the mental process of imagining alternatives to reality. For example:

Counterfactuals come in two flavors:

In both cases, “what if” thinking helps us learn from the past. The challenge is to apply it forward — not just looking back, but imagining the futures our decisions could create.

The Power of Visualising Multiple Futures

Cognitive science shows that humans struggle with abstract probabilities. Tell someone there’s a “30% chance of recession,” and it feels vague. Show them two branching scenarios — one where their savings hold steady, another where their job is at risk — and the concept becomes concrete.

Visualising multiple futures works because it:

  1. Engages Mental Simulation Our brains run “future movies” to predict outcomes. Visuals and scenarios make these simulations richer and more accurate.

  2. Reduces Decision Paralysis When we face uncertainty, we often freeze. Seeing multiple outcomes side by side gives us permission to act without waiting for certainty.

  3. Highlights Trade-Offs Instead of abstract pros and cons lists, branching futures show clear consequences: save more now = more resilience later; spend more now = less flexibility later.

  4. Builds Emotional Preparedness By rehearsing outcomes mentally, we’re less shocked when challenges arrive. The future feels less like an ambush and more like a terrain we’ve already walked.

How “What If” Changes Financial Decisions

Consider a few examples:

Example 1: Investing Early vs Delaying

Example 2: Buying a Home

Example 3: Career Change

In each case, “what if” doesn’t eliminate risk — but it illuminates it.

Why We Resist “What If” Thinking

Despite its benefits, many people avoid scenario planning. Why?

  1. Fear of Bad Outcomes Imagining worst-case scenarios feels uncomfortable, so we prefer to ignore them.

  2. Cognitive Load Holding multiple scenarios in mind is mentally taxing, especially without visual aids.

  3. Illusion of Certainty We like the simplicity of one plan, even if it’s fragile.

  4. Present Bias We focus on short-term comfort instead of long-term resilience.

Understanding these biases helps us overcome them. The goal is not to dwell on fear but to use “what if” as a tool for preparedness.

Tools That Make “What If” Practical

Historically, scenario planning required complex spreadsheets or financial advisors. Today, tools like FutureTree democratize forecasting by:

Instead of abstract probabilities, you see concrete scenarios. The “what if” becomes less of a thought experiment and more of a decision aid.

The Emotional Payoff of Seeing Futures

Financial stress often comes from uncertainty. By making the future visible, forecasting delivers emotional benefits:

This emotional dimension is as important as the financial one. Money is never just numbers; it’s deeply tied to security, identity, and well-being.

How to Bring “What If” Into Your Life

You don’t need to wait for advanced tools to start. Try this simple process:

  1. Pick a Decision: A purchase, investment, or career choice.
  2. Sketch Three Scenarios: Best case, worst case, middle case.
  3. Extend the Horizon: Imagine outcomes 1 year, 5 years, 10 years later.
  4. Visualise: Draw a tree or chart — don’t just keep it in your head.
  5. Decide with Clarity: Use the scenarios not to predict perfectly but to prepare intelligently.

Conclusion: From Fear to Foresight

Life is full of uncertainty. Ignoring it doesn’t make it go away; it makes us more fragile. Embracing “what if” changes the way we think, plan, and act. By visualising multiple futures, we reduce fear, build resilience, and make decisions with greater confidence.

The psychology is simple but powerful: when we see possibilities clearly, we stop being paralyzed by uncertainty and start being empowered by it.

FutureTree is designed to bring the psychology of “what if” into your everyday financial life. By visualising branching futures, you can turn uncertainty into foresight and move forward with confidence. Join the early access list [here].