Saving money can always be a hurricane task because we often have to suppress our wants. As a result, our goals often need to be revised, especially when money saving comes into the picture.
However, research published by the American Psychological Association highlights that people whose savings goals align with their dominant personality traits are more likely to save money.
What is the research all about?
The research was undertaken by Sandra Matz, Ph.D., of Columbia University, and her colleagues Joe Gladstone, Ph.D., of the University of Colorado at Boulder, and Robert Farrokhnia, Ph.D., of Columbia University.
It was conducted to evaluate if aligning people’s savings goals to their personality traits might make it easier for them to save.
How was the research conducted?
Matz and her colleague tested the hypothesis in a survey and a field experiment. The research was conducted in two parts.
First, they analyzed data from 2,447 participants in the United Kingdom who answered questions about their Big Five personality traits (agreeableness, conscientiousness, neuroticism, openness, and extraversion) & their savings goals.
The participants’ goals included things like saving for a future purchase such as a car, leisure/vacation spending, a “rainy day,” and for retirement.
Furthermore, Matz and her colleagues hypothesized that some goals might better fit people with certain personality traits than others.
Besides, the researchers found that people who self-reported their savings goals fit their personality traits well. Interestingly, the effect held true across both types of participants – poor and wealthy.
Also, people who earned more money had more savings, on average. However, personality reported slightly less than 5% of someone’s savings ability amid this.
The second part of the research
Next, the researchers experimented with 6,056 participants in the US, especially those who had less than $100 in savings. All these participants were a part of a savings incentive program called SaverLife.
These participants were given a goal of saving a minimum of $100 more in one month. Furthermore, the researchers divided them into five groups, and each had to undertake a 30-item personality assessment.
Among the groups, one group received five emails during the month and was encouraged to save. Another group received emails with a goal that was a complete mismatch to their personality type.
The third group randomly received goal messages. The fourth group received generic emails which encouraged saving but had no goal specified. Lastly, the fifth group did not receive any emails.
It was observed that only some of the participants opened the emails. However, participants who received emails matching their personalities had the highest success rate.
Overall, people who received emails matching their personality were 3.57 times more likely to achieve the $100 savings target than those in the control condition.
According to Matz, the objective was to try ways to motivate people to save more. “Could we simply highlight how saving money would help them protect their loved ones? This suddenly makes money a means to an end they care about,” added Matz.
Further, Farrokhnia showed satisfaction that their “approach worked.” Farrokhnia commented, “Given the dire facts about savings in the U.S., we were particularly interested in helping to alleviate some of the challenges low-income and distressed households face in managing their finances.
The recent economic downturn, including rising prices and higher challenges around achieving personal savings goals, made this pursuit even more important to us.”