Why are some people able to patiently save for the future, while others opt for smaller amounts of money now? A new study takes a close look at what drives "patient savers," and reaches some surprising conclusions. Saving takes patience. People must sacrifice instant financial rewards in favor of larger, delayed rewards. Yet savers don't slowly weigh their options, balancing various arguments against one another, as other researchers have suggested. They're not necessarily better at resisting temptation, either. Instead, it's simpler than that: When presented with a choice between a smaller dollar amount now or more money weeks later, savers focus immediately on the two dollar amounts, quickly screening out other factors as irrelevant -- as revealed by their eye movements. Then they make a rapid choice in favor of the higher amount. U.S. personal savings rates are at a low point, so understanding what influences saving behavior is important. The researchers hope their findings could help suggest better ways to improve financial literacy.
Visit Website | Image credit: Elvira Koneva/Shutterstock.com