New Research Exposes the Mindset Required to Save Money


Ashley Smith
Public Affairs Coordinator

New Research Exposes the Mindset Required to Save Money

Study analyzes mental framing that helped individuals become more disciplined savers

Key Takeaways: 

  • People are more likely to save money when the dollar amounts are framed as daily contributions instead of monthly contributions.
  • Low-income savers are much more likely to participate in a savings program when savings are presented in a more granular fashion. 
  • This increase in participation among low-income savers eliminated the income saving gap. 


CATONSVILLE, MD, November 3, 2020 – A new research study has exposed the mindset that helps many become more committed to a long-term personal finance savings program. The research found that when savers perceive the amounts they need to save on more granular terms, such as $5 per day as opposed to $150 per month, they are more likely to commit to and sustain a personal savings regimen.

The research study, which was recently published in the May issue of the INFORMS journal Marketing Science, is titled “Temporal Reframing and Participation in a Savings Program: A Field Experiment,” by Hal Hershfield and Shlomo Benartzi of the University of California, Los Angeles (UCLA), and Stephen Shu of City, University of London.

“One of the long-standing dilemmas for millions is not having enough money to retire, yet when you explore the primary reasons for this, you find that many simply have great difficulty finding the discipline, as well as extra space in their budget to build up a substantial retirement nest egg,” said Hershfield. “As more people have become responsible for their own retirement savings through 401(k) programs and other plans, the need to change the way we think about saving for retirement has become a higher priority for society.”

The researchers conducted a field study where they tested the framing of savings programs in granular terms. They studied thousands of new users of Acorns, a fintech app, to see how their framing of the financial deposit decision impacted participation. The study authors analyzed the framing of recurring deposits into accounts in daily amounts versus monthly amounts to determine which generated a higher response. 

“Today, contributions are often framed in terms that reflect traditional paycheck and banking norms where money is only transferred from one account to another on a monthly basis,” said Shu. “We found that the number of consumers who enrolled quadrupled when the amounts were framed as daily amounts, as opposed to monthly amounts, even though the month-to-month savings were the same.” 

The daily frame might be particularly salient for gig-economy workers, who don’t think of household budgets in terms of monthly income. 

The researchers also found that by framing deposits in those granular terms, they were able to reduce the gap in participation between lower- and higher-income consumers. This suggests that the income savings gap can be reduced or eliminated by changing the framing of the financial decision, rather than relying on expensive tax incentives.

“When it was framed as a $150 monthly deposit, three times as many consumers in the highest, rather than the lowest income bracket, participated in the program,” said Benartzi. “When deposits were framed as $5 per day, this difference in participation was eliminated.”


Link to Study


About INFORMS and Marketing Science  

Marketing Science is a premier peer-reviewed scholarly marketing journal focused on research using quantitative approaches to study all aspects of the interface between consumers and firms. It is published by INFORMS, the leading international association for operations research and analytics professionals. More information is available at or @informs.


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