Examining the Effect of Expressing a Quantitative Goal on Consumer Savings

We examine the effectiveness of implementation intention plans for achieving regular savings with small-scale, exploratory field research. A series of surveys required participants in a community-based savings campaign to form implementation intentions concerning timing, mode, amount, and source of income for savings during the next month. Baseline and two follow-up responses from treatment and control groups showed implementation plans that require individuals to express discretionary quantitative savings goals are less effective than those that require a generalized, nonquantitative commitment to save. This result has implications for savings programs, many of which consider an expressed quantitative goal to be crucial for success. ********** A number of studies have demonstrated how the formation of implementation intention plans influences consumer behavior (Gollwitzer 1999). Asking people to specify where, when, and how a goal is acted upon helps initiate goal pursuit and shield intended goals from counterproductive influences. The effectiveness of this action-planning method has been reported for several repetitive, easy-to-forget, sometimes onerous tasks, such as taking medication, eating healthy foods, exercising, and paper recycling (Schweiger Gallo and Gollwitzer 2007). In this study, implementation intention plans are applied to regular savings behavior which extends the implementation intention body of research to a previously unexamined area--financial behaviors. This research also adds a quantitative dimension to the standard implementation intention plan. Study participants are asked to specify mode, timing, and source of savings deposits as well as the intended savings amount. The addition of a dollar amount component to implementation intention plans contributes to the debate about the value of "all-or-nothing" targets as opposed to "graded" targets (e.g., Silverthorne 2009). In addition, this study allows observation of the effect on savings behavior on renewing an implementation plan over multiple time periods. WHY STUDY REGULAR SAVING? We chose to study regular deposits into a savings account for three reasons. First, the importance of regular savings has led to a large body of literature identifying factors associated with savings behavior such as socioeconomic status, age, ethnicity, gender, and socialization (Warneryd 1999; Webley et al. 2000). Second, the concept of implementation intention can be applied to savings behavior. Empirical evidence from the financial counseling and education field (Schuchardt 2005; Sherraden 2000) and consumer surveys (Mueller and Lean 1967; Schreiner, Clancy, and Sherraden 2002) indicates that setting aside money at every pay period is a routine practice that people can follow. Finally, our study design and participants are suited for the study of the usefulness of implementation intention plans. We use survey questions that allow us to confirm and control for the effect of behavioral variables on monthly deposits. This permits us to account for differences between a general savings goal and a specific saving plan that included implementation intentions. Study participants were enrolled in an "America Saves" campaign. America Saves is a national, public awareness campaign managed by the Consumer Federation of America. It is implemented at the state, regional, or community level with the help of a broad network of nonprofit, corporate, and government groups. The campaign seeks to motivate regular, at least monthly, savings deposits by requiring those joining the campaign to complete a savings pledge. The pledge includes the purpose of the savings, a targeted monthly savings amount, a target number of months, and the total amount to be saved (americasaves.org/enroll). Participants are free to implement their goals as they wish; the campaign does not exert control beyond the offer of financial education classes and newsletters. …