Human
How to Increase Your Personal Savings: Take a Lesson from 'Groundhog Day'
Catherine Griffin
First Posted: Dec 25, 2013 10:43 AM EST
Want to increase your personal savings? Then you may want to take a leaf out of Bill Murray's character in the movie "Groundhog Day." Researchers have discovered that a cyclical mindset may be more effective at encouraging short-term savings than the typical linear, goal-oriented approach to time.
"Americans seem to understand and believe in the importance of having an emergency fund, back-up savings or simply 'money in the bank'-and yet, savings rates are still low," said Leona Tam, one of the researchers, in a news release. "Our research suggests a new, alternative method to personal savings that we hope will help to bridge this gap."
In order to examine how people might be encouraged to increase savings, the researchers conducted a study with 157 participants. They found that volunteers who were prompted to take a linear perspective-focused on achieving goals so that the future will be easier-projected they would save less money in the next month than those who read about a cyclical method and who were focused on making routines and habits now to repeat over time. Intrigued by these findings, the researchers then conducted a second study.
The scientists had 145 participants in this second study read one of three prompts about personal savings. The volunteers were then told to apply that approach to their personal savings over a two week period. In the end, the researchers found that participants with a linear mindset saved far less than participants employing the cyclical mindset. In fact, volunteers with a cyclical mindset put away roughly 82 percent more than the two other groups.
"Financial advisers and institutions could incorporate the cyclical method in designing savings programs, and policy makers could consider the cyclical method in their fiscal and social initiatives to help citizens better manage their personal savings," said Tam in a news release. "This could, in turn, lighten social welfare burdens in the long run."
The findings are published in the journal Psychological Science.
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First Posted: Dec 25, 2013 10:43 AM EST
Want to increase your personal savings? Then you may want to take a leaf out of Bill Murray's character in the movie "Groundhog Day." Researchers have discovered that a cyclical mindset may be more effective at encouraging short-term savings than the typical linear, goal-oriented approach to time.
"Americans seem to understand and believe in the importance of having an emergency fund, back-up savings or simply 'money in the bank'-and yet, savings rates are still low," said Leona Tam, one of the researchers, in a news release. "Our research suggests a new, alternative method to personal savings that we hope will help to bridge this gap."
In order to examine how people might be encouraged to increase savings, the researchers conducted a study with 157 participants. They found that volunteers who were prompted to take a linear perspective-focused on achieving goals so that the future will be easier-projected they would save less money in the next month than those who read about a cyclical method and who were focused on making routines and habits now to repeat over time. Intrigued by these findings, the researchers then conducted a second study.
The scientists had 145 participants in this second study read one of three prompts about personal savings. The volunteers were then told to apply that approach to their personal savings over a two week period. In the end, the researchers found that participants with a linear mindset saved far less than participants employing the cyclical mindset. In fact, volunteers with a cyclical mindset put away roughly 82 percent more than the two other groups.
"Financial advisers and institutions could incorporate the cyclical method in designing savings programs, and policy makers could consider the cyclical method in their fiscal and social initiatives to help citizens better manage their personal savings," said Tam in a news release. "This could, in turn, lighten social welfare burdens in the long run."
The findings are published in the journal Psychological Science.
See Now: NASA's Juno Spacecraft's Rendezvous With Jupiter's Mammoth Cyclone