Positive Inspiration Really Helps Boost Your Savings Goals
Save money – it’s good for the future, but now spend their fun. Connecting your present and future self is one of the biggest challenges in money management. Research shows that random positive impulses can actually help you achieve your goals.
In a study published by the Rand Corporation, researchers looked at various money-saving techniques to see how effective they were. Participants were told that they would win a random lottery of $ 50, $ 100, or $ 500 for participating in the study, but they had to decide how much they wanted to save. They were also assigned one of three types of accounts:
- “Traditional” account: “A typical savings account that will return 30% per annum for the next six months with no withdrawal restrictions.”
- “Hard Committed ” Account: “An account that prohibits the withdrawal of any deposited amounts until the end of the experiment six months later. This account also brought in 30% per annum ”.
- Soft Commitment Account : An account that was “identical to a traditional account but included soft nudges to encourage respondents to save.”
These nudges included reminding them of their savings goals, asking them to use one word to describe how they would feel when that goal was achieved, and then writing, “I’m a good lifeguard. I can achieve my savings goal. “
Every month, depositors were sent balance updates and asked if they wanted to save more. At the end of the experiment, depositors with soft commitments were generally more successful. They explained the study:
… the processing of soft commitments resulted in a moderate (and, in the case of a $ 500 payment, statistically significant) increase in the amounts saved at the end of the study compared to participants who received no commitments. This effect was concentrated among people who were impatient and therefore more likely to benefit from increased intrinsic motivation.
This is one study, and your own experience may be different, but it shows that a few tips for saving money actually work, namely: remember why you want to save in the first place, and implement some kind of responsibility to remind you that you are capable. If you have savings goals for New Years, send yourself periodic reminders about why your goal is important. Keeping a goal in mind will make it more relevant and more inclined to stick to it. To learn more about the study, follow the link below.
Hard and soft commitments | RAND via Oregon Live