Unraveling the Psychology of Saving: Personalized Saving Goals Aligning with Personality Traits Achieve Greater Success

In the current climate of rising inflation, global conflicts, and the energy crisis, saving money has become an increasingly challenging task. In Germany, a representative online survey conducted by the Institute of German Business has revealed that only one in two people manage to save. Increased living costs add to the difficulties, as setting aside savings often means consciously choosing not to make a purchase. Achieving personal saving goals has thus turned into a significant psychological challenge. A recent US study illuminates a potential solution: people save money more effectively when saving goals align with their personality traits.

How Personality Traits Impact Saving Habits

Sandra Matz, Joe Gladstone, and Robert Farrokhnia, the researchers behind the study, have investigated whether saving goals aligned with individuals' personalities result in better achievement rates. In their previous research, they hypothesized that highly conscientious individuals, for instance, may more easily achieve saving goals such as retirement funds, compared to particularly agreeable and sociable people who've been conditioned to value others' appreciation over money.

When Saving Goals Match Personalities

In their study published in the Journal of the American Psychological Association, they first gathered data from 2,447 participants from the United Kingdom. Participants were asked questions related to the "Big Five" personality traits - Openness to Experience, Conscientiousness, Extraversion, Agreeableness, Neuroticism. Additionally, they were questioned about their saving goals, such as buying a car, planning for the next vacation, or preparing for retirement. The researchers found that individuals whose saving goals matched their personality traits were able to save more money on average. This phenomenon was observed across all groups, regardless of their wealth status.

The Power of Tailored Saving Goals

In a follow-up study with 6,056 participants, individuals were given less than $100 and tasked to save at least an additional $100 within a month. After a personality test, the participants were divided into five groups. They received various emails either presenting saving goals matching their personalities, not matching their personalities, mixed goals, or generic ones. One group received no emails. The goals included saving for a future purchase like a car, leisure activities or a vacation, "rainy days", and retirement.

The probability of those who received goals tailored to their personality reaching the saving target of $100 was 3.57 times higher compared to other participants in the control group. Researcher Farrokhnia emphasizes that these findings could be especially helpful in supporting individuals who struggle with managing their finances.

The Behavioral Design Solution to Achieve Saving Goals

In light of these insights, it's evident that tailoring saving goals to individuals' personalities can significantly increase their effectiveness. This approach paves the way for new strategies to support those who find managing their finances overwhelming, fostering a more robust financial future for all.

By understanding the key behavioral economics findings, such as those from the research of Matz, Gladstone, and Farrokhnia, Monkee has created an innovative approach to help people save more effectively.

Monkee aligns saving goals with individual personality traits, mirroring the study's findings. Its easy-to-use platform prompts users to input their personal financial goals. Based on the user's personality traits, determined through an interactive and engaging process, the app suggests tailored saving strategies. This personalization enables users to see their saving journey not as a distant, abstract concept, but as an achievable, closely aligned part of their lifestyle.

Beyond simply setting goals, Monkee uses the principles of Nudge Theory and the Zeigarnik Effect to keep users engaged and motivated. It sends timely notifications and progress updates, turning open-ended tasks into manageable, bite-sized pieces. This approach reduces the stress associated with long-term saving and reinforces healthy financial habits.

Moreover, Monkee provides real-time data on spending and savings, helping to overcome the 'anchoring' bias. It shows users how much they can realistically save based on their actual transaction data, facilitating more significant savings.

Monkee's commitment to leveraging behavioral economics in personal finance has already shown promising results. Users of the app report improved saving habits, increased financial security, and a higher rate of goal achievement. In essence, Monkee is at the forefront of turning the psychology of saving into a user-friendly, effective, and rewarding experience.

In conclusion, the challenge of saving money in today's complex economic landscape may be daunting, but it's not insurmountable. With insights from behavioral economics and innovative platforms like Monkee, we can tailor financial strategies to individual personalities, fostering a more robust financial future for all.