People save more when goals match their personality behavior

A study conducted by researchers at Columbia University and the University of Colorado at Boulder, both in the US, assessed whether matching savings goals with people’s personality traits could help them save more money. And everything indicates that, yes, this can come in handy.

In previous surveys, the research’s co-authors—Sandra Matz, professor of management at Columbia University, and Joe Gladstone, professor and researcher of financial decision-making in Colorado—showed that people with a high level of agreeableness saved less. One reason is that they would have learned that “good people” are not attached to money or that it is not possible to value people and at the same time care about money.

For this new study published in the January issue of the journal american psychologist, It has been hypothesized that some goals may be more appropriate and “motivating” for people with certain personality traits. For example, someone with a higher level of diligence may be more willing to plan for the future and therefore more motivated to save for retirement.

“We try to think of ways to motivate good people to save more,” says Matz. NB. “Can we just highlight how saving money will help them protect their loved ones? It will suddenly make money a means to an end that they care about.”

To see if this would work, the researchers ran two experiments. In the first study, data was analyzed from 2,447 volunteers in the UK who answered questions about their habits around money and the Big Five personality traits.

The questionnaire included questions related to financial goals, traits of agreeableness, conscientiousness (industriousness), neuroticism (emotional instability), openness, extroversion, and extraversion. The goals listed ranged from saving, having an emergency reserve, going on a trip, buying a car, or retiring.

As a result, research has shown that people whose savings goals align best with dominant personality traits have, on average, a larger nest egg. This effect was seen among both rich and poor volunteers—but, of course, those who earned more with savings, too. Researchers estimate that about 5% of the variance in the amount of savings across all income levels is affected by people’s personality traits.

In the second experiment, 6,056 people who were part of the SaverLife savings program in North America participated. All of the volunteers saved less than $100 when they started the project, and within a month they were on a mission to save at least $100 more than they had.

The participants were then divided into five groups that received five emails over the course of a month:

• Those who will receive emails from the platform containing messages encouraging them to save for goals that relate to their character;
• those who received emails with messages unrelated to their personality;
• people who received messages that encouraged random goals;
• those who have received public emails;
• And who did not receive any messages.

Not all participants read the emails sent, but those who did were able to save more. And those who received messages encouraging them to save for goals related to their profile were the most likely to meet the goal of saving $100 in a month: 11.4% achieved this. In comparison, it reached 7.85% among those whose message does not match their personality. 7.46% among those who received spam and 7.42% among those who received regular emails. Only 3.4% of those who did not receive messages managed to achieve the goal, and among those who did not open emails, 3%.

Overall, according to Gladstone, people who received the in-person intervention were 3.57 times more likely to reach their $100 savings goal than those in the control condition.

“It was great to see the success of this approach,” said Robert Farokhnia, co-author and professor of management at Columbia University. “Given the dire realities about savings in the United States, we are especially interested in helping to alleviate some of the challenges that low-income and struggling families face managing their finances.”