Thursday, 10 June 2010

Is this why many people who plan to save fail?

We’re always told to make our goals concrete but, according to new research, the best savers make abstract plans. The researchers say it’s better to focus on the ‘why’ question of saving, rather than the ‘how’, because people who focus on concrete aspects of their goals fail to spot other opportunities to save money.

"Imagine a person who has a goal to save money. The person forms a plan to purchase fewer clothing items at the mall," say the authors of the study in the Journal of Consumer Research. "Would the person also be more likely to order a cheaper meal at a restaurant, avoid making an impulse purchase, or combine errands to save money on gas?"

The authors conducted four experiments. In one, people were asked to list a specific plan to save, whereas others were not asked to plan. Then some people were asked to focus on why they wanted to save money. Subsequently, all participants were given the opportunity to buy candy. The goal-setters weren’t so good at resisting the urge to splurge on candy.

"Planning is more effective when people think abstractly, keep an open mind, and remind themselves of why they want to achieve a goal," the authors write. "This strategy is especially effective when the plan turns out to be unfeasible (cheaper restaurant is too far away, gym is closed today for a holiday) or when other goal-directed activities become available (walk instead of taking a cab, eat a healthier meal)."

University of Chicago Press Journals (2010, May 19). Asking 'why' instead of 'how' helps consumers achieve goals of saving money or losing weight. ScienceDaily. Retrieved June 10, 2010, from


  1. Like the rationale.

    I believe if you are clear about what you want to achieve, set SMART objectives to do so and establish a clear plan your financial goals are more likely to be realised.

    Once you know what you need to save by setting up a direct debit/standing order to a savings/investment vehicle each month to coincide with pay day you will soon forget the money is leaving your account and leave with your new disposable income quite happily.


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