Study shows students need help to save money, but don't always know it
Washington, August 26 (ANI): A new study has suggested that students could use help saving more money, but they don't always know it.
Most people intend to save more money, and spend less, than they currently do. If they were offered a simple way to do so, would they take it? New research suggests the answer is no.
And the reason is that their very good intentions can give rise to a sense of optimism that leads them to undervalue opportunities that could make it easier to actually achieve a long-term savings goal.
"Our results highlight the costs of being too optimistic," said the study's senior author, psychology professor Derek Koehler.
Researchers at Waterloo asked students in the university's co- operative education program to set a savings goal at the beginning of a work term, and then asked them again at the end of the term whether they had met their goal. Co-op students alternate work and study terms, and most plan to save much of their earnings from the work term for use during the subsequent study term.
At the beginning of the term, the students expressed strong intentions to save and estimated their chances of doing so to be quite high, around 85 per cent on average.
But only 65 per cent of the students reported having been successful.
Some of the students were offered enrolment in a program that could help them to save. The program required them to monitor their savings and report their progress every other week during their work term. It turns out that the students in the program were more successful at achieving their savings goals.
Although the progress-report program helped the students to save, the students failed to recognize its benefits.
In a second study, the progress-report program was described to another group of students, who were asked how much they were willing to pay to be enrolled in it. (The cost was deducted from an 8 dollar payment the students received for being in the study.)
Students were typically unwilling to pay more than 1 dollar for the program, and the most common response was zero.
The study's authors suggest that being overly optimistic about achieving future goals, whether in saving money or in some other aspect of life, can be costly if it leads people to overlook ways in which they could make it easier to accomplish those goals.
The study, Good Intentions, Optimistic Self-Predictions, and Missed Opportunities, is scheduled to appear in a forthcoming issue of the journal Social Psychological and Personality Science. It is available online at spp.sagepub.com/content/early/recent. (ANI)