Individuals are more likely to save money when savings goals align with their dominant personality traits, according to a new study published by the American Psychological Association (APA).
This finding is critical since savings rates are severely low both in the United States and abroad. In fact, the Bureau of Economic Analysis reported in October 2022 that Americans are saving only 2.3% of their earnings– which is the lowest savings rate in almost two decades.
And while most people would like to save more money, the practice is extremely challenging– especially because putting away funds requires people to forego instant gratification in the present to invest in their futures.
That’s why the research team, hailing from Columbia University and the University of Colorado at Boulder, set out to study whether or not aligning an individual’s savings goals with their personality traits could make saving money easier.
Past research has found that when people are highly agreeable, they are less likely to save money. This relationship may tie back to different value judgments– with highly agreeable people thinking that valuing money conflicts with valuing people.
“We tried to think of ways we could motivate agreeable people to save more,” said Sandra Matz, the study’s lead researcher.
“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.”
And overall, the team wondered whether certain savings goals might make more sense for people with specific personality traits. So, they tested this hypothesis using both a survey and a field experiment.
To begin, the team collected data from 2,447 United Kingdom-based participants who were asked to answer questions about the Big Five personality traits– which include conscientiousness, agreeableness, neuroticism, extraversion, and openness. Additionally, the participants were asked about their money-saving goals.