Doing it the Hard Way: More Effortful Saving Leads to Less Investing

• In Event: 5.2 Managing Finances: Insights into Consumers’ Perceptions of Budgeting, Savings and Debt Management

Short Abstract

Consumers can build wealth over time by saving and subsequently investing their money. While past research suggests encouraging effortful financial behaviors can increase consumers’ savings, we show in seven studies using real money that perceiving saving as effortful can backfire, reducing individuals’ willingness to invest, leading to lower accumulated wealth.

Authors

• Joshua I Morris, Stanford University, USA

• Szu-chi Huang, Stanford University, USA

• Christopher Bechler, Stanford University, USA