Helping consumers save more by bursting their bubble of financial responsibility

February 04, 2021

Researchers from University of Notre Dame, York University (Canada), and University of New England (Australia) published a new paper in the Journal of Marketing that identifies a novel reason why people under-save and demonstrates a simple, short, and inexpensive intervention that increases intentions to save and actual savings.

The study, forthcoming in the Journal of Marketing, is titled "Popping the Positive Illusion of Financial Responsibility Can Increase Personal Savings: Applications in Emerging and Western Markets" and is authored by Emily Garbinsky, Nicole Mead, and Daniel Gregg.

People around the world are not saving enough money. Since increasing personal savings is critical for individual and societal welfare, many researchers have tried to identify reasons why people under-save. Most of these reasons, however, do not lend themselves to behavioral interventions.

Garbinsky explains that "We show that one reason people under-save is because they hold the positive illusion of being financially responsible. In other words, most people hold positively distorted beliefs about how well they save and manage their money because this allows them to feel good about themselves. In our study, we show that most people view themselves as more financially responsible than their average peer, which is statistically impossible."

Building on this finding, the research demonstrates that offsetting this positive illusion of financial responsibility motivates people to restore this diminished self-view. In other words, when people perceive that their past financial behaviors have fallen short of their desired standard (in this case, to be a financially responsible person), they enact behaviors to close the gap (in this case, by allocating more money to their savings).

"As part of the study," Gregg says, "we created what we call the 'superfluous-spender intervention' that influenced people to believe they were not saving as well as they believed. Across a series of six experiments, we show that people receiving the superfluous-spender intervention increased both intentions to save and actual savings relative to those who do not receive the intervention. Our theoretical reasoning is that the intervention increases saving by inducing one's desire to restore diminished perceptions of financial responsibility."

The study also sheds light on two managerially relevant factors about when and for whom the intervention is most likely to be effective. More specifically, the intervention is only expected to increase savings if people can draw perceptions about their own level of financial responsibility. Because past research has shown that people reach conclusions about themselves only when past behavior was freely chosen, the intervention is only effective when past financial behaviors are highlighted that were under one's control and therefore attributable to the self. Also, the intervention is most effective among people who are motivated to perceive themselves as financially responsible.

In closing, although it may be tempting to think that the savings silver bullet is to make consumers feel better about themselves in the financial domain, the empirical data from this research suggest otherwise. "We illuminate that the illusion of financial responsibility is a novel antecedent to saving and that financial stakeholders can combat this self-enhancing bias to encourage consumers to commit to saving more," says Mead.
Full article and author contact information available at:

About the Journal of Marketing

The Journal of Marketing develops and disseminates knowledge about real-world marketing questions useful to scholars, educators, managers, policy makers, consumers, and other societal stakeholders around the world. Published by the American Marketing Association since its founding in 1936, JM has played a significant role in shaping the content and boundaries of the marketing discipline. Christine Moorman (T. Austin Finch, Sr. Professor of Business Administration at the Fuqua School of Business, Duke University) serves as the current Editor in Chief.

About the American Marketing Association (AMA)

As the largest chapter-based marketing association in the world, the AMA is trusted by marketing and sales professionals to help them discover what is coming next in the industry. The AMA has a community of local chapters in more than 70 cities and 350 college campuses throughout North America. The AMA is home to award-winning content, PCM® professional certification, premiere academic journals, and industry-leading training events and conferences.

American Marketing Association

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