Financial responsibility means managing money in a relatively prudent manner by reducing luxurious or unnecessary spending. But according to new research from the University of Notre Dame, people feel they are more financially responsible than they really are.
Even when people consistently spend their money brilliantly, they believe that they manage their money in a responsible fashion, “Positive Illusion of Financial Responsibility Positive Employees Is An Personal Savings: Applications According to “Emerging and Western Markets”, upcoming Marketing journal From Emily Garbinski, assistant professor of marketing at Notre Dame’s Mendoza College of Business.
Gurbinski recently published a study on financial infidelity, “People usually have a positive illusion of being financially responsible, because it enables them to feel good about themselves.”
Garbinski along with Nicole Mead from York University and Daniel Gregg from the University of New England in Australia developed an intervention that triggers people to recognize how often they spend money unnecessarily. This realization, in turn, motivates them to boost their self-perception of financial responsibility by increasing savings.
Participants who participated in the “superfluous-spender” intervention responded to a brief survey of five questions before making a savings decision. Instead of cooking at their home, expenses were focused on going out for dinner. Importantly, participants answered these five questions using a continuous scale that was anchored by a relatively low frequency (once or less in 1 year) or relatively more high frequency (Equals 12+ times in 7 years). Researchers have largely designed the anchors in such a way that most participant responses would fall in the upper range, with higher scores indicating greater frequencies of previous exaggerated spending.
Ensuring that most responses fell into the upper limit, as previous research has shown that people use their placements on rating ratings to make assumptions about themselves (in this case, that they are financially responsible Are not, as they thought they were). This realization motivates them to increase their feelings of financial responsibility. Saving.
In addition to testing the effectiveness of this intervention on students at Notre Dame and the University of York as well as various online panels, the team conducted two studies with chronically poor coffee producers in rural Uganda — one study to influence the savings of savings Intervention ability examined earnings over time, while other studies examined intervention ability to influence financial windfall savings. “The latter is particularly important in developing countries,” Garbinski explained, “as a booming policy option with large monetary transfers that have been given a ‘blow’ to struggling households.”
“Collectively, this work shows that people view their financial responsibility through rose-colored glasses, which can undermine their financial well-being,” Gurbinsky said. “People around the world are not saving enough Money, And we propose that one reason they are under-served is because they consider themselves financially responsible. If this is indeed the case, saving this inflated self-view can increase savings, as people must be motivated to restore perceptions. financial responsibility”
Emily Ann Gurbinsky et al. Express: Preventing Positive Confusion of Financial Responsibility Can Increase Personal Savings: Applications in Emerging and Western Markets, Marketing journal (2020). DOI: 10.1177 / 0022242920979647
University of Notre Dame
Quotes: Saver or spender? People are not as financially responsible as they might think, the study suggests (2021, 13 January) on 13 January 2021 https://naveenbharat.org/news/2021-01-saver-spender-people-financially Retrieved from -responsible.html.
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