Research: Individuals exhibiting this specific trait tend to accumulate significantly higher savings compared to others
A groundbreaking study has revealed that optimism plays a significant role in saving behaviour, particularly among low-income individuals. The research, conducted by researchers from the University of Colorado Boulder (CU) and the University of New Hampshire (UNH), surveyed over 143,000 participants from the USA and 14 European countries, including Germany.
The study found a correlation between optimism and the ability to save money, suggesting that a positive attitude towards the future may contribute to increased savings. On average, optimistic people save 16.9 percent more money than pessimistic people.
Savings behaviour is shaped by attitude towards saving, subjective norms (social influences), and perceived behavioural control (one’s sense of capability to save). Positive psychological factors such as future orientation and self-control promote saving behaviour, reflecting the importance of optimism and goal-directed motivation.
Among low-income individuals, optimism often fosters future orientation but may be tempered by present economic limitations, affecting actual saving capacity. High-income individuals, on the other hand, generally have more discretionary income and safety nets, so their optimism can more directly encourage saving and investment behaviour due to lower present financial stress.
The results of the study remained clear, with the impact of optimism being most pronounced among low-income individuals. The results were consistent across different countries, age groups, and measurement methods, indicating a universal truth about the relationship between optimism and savings.
Factors such as financial education or individual risk tolerance had a weaker influence on saving behaviour compared to optimism. The effect of optimism on saving money is most pronounced among low-income individuals.
The study examined optimism alongside five other personality traits: conscientiousness, extraversion, agreeableness, emotional stability, and openness. Interestingly, the effect of positive thinking is comparable to that of conscientiousness, a personality trait linked to financial responsibility.
However, among the top 10 percent, mindset made a much smaller difference in saving behaviour. This could be because higher-income individuals often save automatically, reducing the role of psychological factors.
In summary, optimism influences savings by enhancing future-oriented attitudes and self-control, but its impact is moderated by income level—high-income individuals' optimism tends to result in more stable saving behaviour, whereas low-income individuals’ optimism interacts with financial constraints, often limiting savings despite positive intent.
This understanding aligns with behavioural theories emphasizing the role of attitude, perceived control, and socio-economic context in determining financial outcomes. The study provides valuable insights into the psychological factors influencing savings behaviour and offers potential avenues for financial education and intervention programmes to help low-income individuals save more effectively.
- The study concluded that optimism, similar to conscientiousness, a trait linked to financial responsibility, significantly impacts savings behavior, especially among low-income individuals.
- Given their financial constraints, low-income individuals' optimism may foster future-oriented attitudes and self-control, but its impact on actual saving capacity can be limited compared to high-income individuals who have more discretionary income and safety nets.
