Last August, financial psychologist Dr. Brad Klontz and his team from Creighton University tested whether emotions play a factor in a person’s drive to save. Dr. Klontz gathered participants from Boston, Austin, Seattle, Atlanta, and Dallas, and separated them into two groups: a “control” group and a “sentimental” group. Participants from the sentimental group were asked to bring an item that they’re emotionally attached to.
For the study, both groups underwent a financial education presentation. The talk focused on the importance of saving, the power of compound interest, and various savings strategies. For the sentimental group, the presentation was packaged and the exercises given mostly revolved around their feelings for their beloved items. On the other hand, the control group was given a straightforward lecture with no emotional angle.
Three weeks later, participants were asked to report their savings behaviors. While both groups significantly increased their savings, there was, however, a major difference with the amount saved: the control group increased their savings only by 22 percent; while the sentimental group increased their savings by a whopping 67 percent.
The researchers also found the following:
Readiness to save: The sentimental group’s readiness to save increased three times more compared to the control group.
Confidence to save: The sentimental group’s confidence to save increased twice as much as the control group.
Financial health: The sentimental group’s financial health increased four times more than the control group.
According to Dr. Klontz, the experiment has proven that positive emotions elicited by the nostalgic items that the participants brought has, indeed, inspired them to save more.
“We hypothesize that the experimental group participants were able, through positive, emotionally charged memories, to develop a deeper emotional incentive for saving money. The exercises they engaged in may have enabled them to more viscerally relate saving money to the family, life values, and goals that mean the most to them,” he said.
He adds: “By incorporating personal nostalgia and savings experiences into financial planning—workshops, money coaching conversations, or even self-directed processes—it may be possible to successfully harness a person’s positive emotions related to their past to facilitate healthier financial decision-making.”
Here are some tips that the study suggested to help you get more emotionally attached to saving money:
1) Be specific by using visual motivators
Simply thinking about saving is not enough. “Get specific about what it is you’re saving for," says Dr. Klontz. "What do you truly want and what would it feel like. Cut a picture out of a magazine and put it on your mirror or wallpaper of your smartphone that you see daily. Those types of visual images keep us motivated and tap into that emotional brains.”
2) Be creative when naming your savings account
Instead of naming your savings accounts as, well, “savings,” Dr. Klontz suggests that you should name it based on your goal. For example, you can start by labelling your bank books or savings envelopes with terms such as “For Masters Degree,” “For Future Home,” “For Dream Car,” and more. “Make it something that’s really exciting that ties into your value and put a date on it,” he suggests.
3) Be strict with it
Make saving easier by scheduling automated deposits into your savings account. If this is hard for you to do, ask a friend or a loved one to collect the money from you. “Set a specific amount for every month or every week. Take that commitment and execute it in a way that works for you so the money gets transferred to that account,” Dr. Klontz advises.