Feeling Powerful Helps People Save More Money
A new study has found that people save more money when they feel powerful.
Researchers Emily Garbinsky, doctoral student in marketing, and Drs. Jennifer Aaker from Stanford University and Anne-Kathrin Klesse from Tilburg University in the Netherlands, conducted five experiments to see whether the decision to save money was affected by how the person was feeling during the time they were making the saving decision.
Across all five studies, the researchers found that when made to feel powerful, the amount of money someone is willing to save for the future increases.
In one study, some participants were made to feel powerful and were asked to sit in a tall chair. Other participants were made to feel powerless and were asked to sit on a low ottoman.
All participants were asked to respond to some questions and were then given the option to either collect their study compensation in cash or to put it in a lab savings account.
Results showed that the individuals who sat in the tall chair saved more of their money than those who sat on the low ottoman, the researchers report.
Another study revealed that making people feel powerful only increases saving when they are told they will be saving money to keep it or when they are not given a specific reason to save.
In other words, making people feel powerful only motivates them to save money when the purpose of saving is to accumulate financial resources, and not when the purpose of saving is to spend those resources later, the researchers explain.
According to the researchers, companies offering financial services like retirement planning can use these results to help their customers prepare for the future, including the creation of more effective intervention strategies. Consumers can also use the results to better understand their own personal relationships with power and money, the researchers noted.
“People who feel powerful use saving money as a means to maintain their current state of power,” the researchers said in the study, which was published in the Journal of Consumer Research.
“When saving no longer affords individuals the opportunity to maintain power, the effect of power on saving disappears.”
Source: Journal of Consumer Research
Wood, J. (2018). Feeling Powerful Helps People Save More Money. Psych Central. Retrieved on July 15, 2020, from https://psychcentral.com/news/2014/06/28/feeling-powerful-helps-people-save-more-money/71852.html