In a recent post, Are You Saving Too Much? I noted that we’re all familiar with the idea of finding balance. Ideally, you are currently living life to the fullest and have an adequate plan in place to ensure your future is financially secure. If you are saving more than you need in that future, you are not spending money today that could be spent on activities that bring you pleasure. A new study from MotivIndex indicates that saving too much for the future doesn’t appear to be the problem for many.
I’m sure that doesn’t come as a surprise to most of the readers here.
According to Digital Motivation ResearchTM from MotivIndex, the pioneer of an innovative new research method that analyzes people without influence or observational bias, 4 out of 5 individuals (80 percent) do not believe in delayed gratification when it comes to saving, yet that is the message given to most of them through various financial education programs.
Using a team of PhD Sociologists, MotivIndex studied the beliefs of over 4,500 Americans and found that the people who are less likely to save for retirement actually felt alienated and turned off when a financial institution tells them to “change” their behavior and/or think “long term.” In fact, the findings showed that these consumers are actually compelled to lie when asked about their financial intentions and plans as they are emotionally unwilling to change their spending habits.
Nearly half of the non-saving population (40 percent) also believes that spending money and taking on debt is okay as long as it’s done with the welfare of others in mind and justifies spending decisions based on the belief that it benefits others in their family or circle of friends. These individuals have a vision for how their life is supposed to be, so they do everything in their power to achieve it. Whether it involves investing in organized sports for their children, buying a bigger more expensive home, upgrading their cars, or even rewarding their loved ones with expensive dinners and experiences, this cohort ignores logic for the emotional satisfaction of doing something that benefits others.
Each year, consumers are asked about their saving intentions and they consistently claim they will save more money, invest it better, and spend less frivolously. Using data culled from antiquated research methods, financial institutions launch literacy programs, new saving devices and marketing campaigns to educate people about retirement etc., yet people’s saving habits never change.
“By analyzing the unspoken motivations of consumers, we were able to discover that traditional education methods were ineffective, as consumers considered the messages used by financial institutions to be more like finger wagging,” said Jason Partridge, Co-Founder of MotivIndex. “To truly resonate with individuals, the financial community should start with programs that provides individuals with a reason to save short term by connecting it to important events in their lives. The bottom line is that financial institutions must build trust before trying to get people to think about the future.”
MotivIndex Inc. is the pioneer of Digital Motivation Research – rapid turnaround, high-quality, market research services. With its proprietary methodology and revolutionary approach of revealing unspoken motivations through the digital observation of consumers and voters, MotivIndex is disrupting the way companies and politicians uncover opportunities that drive real value. Using a team of PhD Sociologists and Political Scientists to analyze millions of publicly available conversations, MotivIndex deconstructs the lives of thousands of people, without influencing them through observation bias or interrupting them with questions and group think. For more information visit www.motivindex.com, follow their co-founders on Twitter @Interpretivist, @copywrestler, connect on LinkedIn, or call (416) 823-3326.