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People save more money when their goals fit their personality

It is important to put aside money for unforeseen events in one’s life, and also for specified goals, such as vacations, or buying a car or a house. But saving is never easy. In the U.S. and around the world, savings rates are currently critically low. In October 2022, the Bureau of Economic Analysis reported that Americans save just 2.3 percent of their income, the lowest in nearly two decades.

Dr. Sandra Matz of Columbia University, and her colleagues Dr. Joe Gladstone and Dr. Robert Farrokhnia, wondered whether it would be easier for people to save if their goals were aligned with their personality traits. The experts set out to test this, hypothesizing that some saving goals might be a better fit for people with certain personality traits. For example, a very conscientious person might be more likely to plan for the future and thus be more motivated to save for retirement.

Previous research by Matz and Gladstone found that people who are very agreeable are less likely to save than others, possibly because they’ve been taught that valuing people and valuing money are at odds with one another, and that “nice people” don’t value money.

“We tried to think of ways we could motivate agreeable people to save more,” said Dr. Matz. “Could we simply highlight how saving money would help them protect their loved ones? This suddenly makes money a means to an end that they care about.”

In the current study, the researchers made use of a survey and a field study to test whether people would be more successful at saving money if their personality traits fitted with their saving goals. Their results are published in American Psychologist, the journal of the American Psychological Association.

First, the experts 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), as well as their savings goals. They also revealed how much of a “nest egg” they had managed to save. Independent raters coded the savings goals into categories of fit for the personality traits. Goals included such things as saving for a future purchase such as a car, saving for leisure/vacation spending, saving for a “rainy day,” and saving for retirement.

The researchers found that people whose self-reported savings goals were a good fit for their personality traits had a bigger nest egg, on average. This was true for both poorer and wealthier participants. Not surprisingly, people who earned more money had more savings, on average, but personality-goal fit explained about 5 percent of the variance in savings amount across all income levels.

Next, the researchers conducted a field experiment with 6,056 participants, all of whom were taking part in a savings incentive program through a non-profit savings app called SaverLife. Participants in the study started off with less than $100 in savings when they joined the program and were given the goal of saving at least $100 more in one month.

The participants all took a 30-item personality assessment, and were then divided into five groups. The members of one group received five emails during the month encouraging them to save towards a goal that was a good fit with their most salient personality trait. Another group received emails encouraging them to save, but with a goal that was mismatched to their personality type. The third group received randomly selected goal messages, while the members of the fourth group received emails with a generic message encouraging saving but with no particular goal. The fifth group did not receive any emails.

Not all of the participants opened the emails, but for those who did, the participants receiving the personality-matched savings message had the highest success rate, with 11.4 percent reaching the $100 savings goal. 

Participants in the standard message group had less success, with 7.42 percent achieving the goal, while 7.46 percent of those who received a random message managed to save $100. A total of 7.85 percent of participants who received the personality-mismatched message reached the savings goal, whereas only 3.4 percent of those in the no-email control condition successfully saved $100.  Participants who didn’t open their emails had about a 3 percent success rate.

Overall, according to Dr. Gladstone, people who received the personality-tailored intervention were 3.57 times more likely to achieve the $100 savings target than those in the control condition.

“It was wonderful to see that this approach worked,” said Dr. Farrokhnia. “It was important for us from the get-go to not only contribute to the existing literature and have a vigorous research study, but also to deploy the findings in the real world and come up with something companies could actually use and implement. 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.”

By Alison Bosman, Staff Writer

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