The Fewer the Better: Number of Goals and Savings Behaviour

The Fewer the Better: Number of Goals and Savings Behaviour

7 July, 2020    

This article examines the effect of the number of goals on consumers’ savings behavior. Drawing from research on implementation intention, the authors show that under certain conditions, presenting a single savings goal leads to greater savings intention and actual savings than presenting multiple savings goals. Multiple goals typically evoke trade-offs among competing goals and thus increase the likelihood that people will remain in a deliberative mind-set and defer actions. In contrast, the authors pro pose and demonstrate that a single goal evokes a stronger implementation intention, which in turn has a greater effect on behavior change. They also show that the advantage of a single goal over multiple goals on saving is attenuated when saving is easier to implement or when the multiple savings goals are integrated rather than competing among themselves. Theoretical and practical implications are discussed.

Similar Articles
Saving More in Groups: Field Experimental Evidence from Chile
We test the impact of a peer group savings program on precautionary savings, through two randomized field experiments among 2,687 microcredit clien...
Smallholder access to weather securities in India
Weather-based insurance products insure farmers against production risks on the basis of a weather index that is highly correlated to local yields....
The ABCs of Financial Literacy–Experimental Evidence on Attitudes, Behavior and Cognitive Biases
This paper uses a large-scale field experiment in India to study attitudinal, behavioural, and cognitive constraints that stymie the link between f...