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Abstract
Although financial decisions are expected to be rational, there is a growing body of experimental research indicating that small psychological changes in one’s mind-set in the actual decision-making moment might affect saving ratios. In this article, another type of change in one’s mind-set, which can influence saving decisions, is explored, namely the level of construal. Construal level is a key descriptor of people’s cognitive representations of targets, and is a way of characterising the mental mind-sets people use. Building on recent advances in the link between construal levels and intertemporal choices, the present research evaluates the effect of shifts in levels of construal in the very moment of decision making on people’s propensity to save money. It is suggested that triggering a high-level construal mind-set would influence individuals’ financial decisions and result in greater willingness to save than triggering a low-level construal mind-set. This assumption is supported by the findings: across three experiments, those with an abstract mind-set showed an increased willingness to save when compared to those with a concrete mind-set. The first experiment demonstrated that people in an abstract mind-set are more willing to delay financial gratification than those in a concrete mind-set. In the second and third experiments, those with an abstract mind-set showed an increased willingness to save when compared to those with a concrete mind-set. The research provides further evidence that mental states, which can be evoked by previous, unrelated tasks, such as level of cognitive abstraction, can influence everyday financial decisions. It, thus, highlights the role of situational factors that consumers may be not aware of, which still affect their savings decisions.
Highlights
The ability to make savings is important for national economic systems, it is essential for the proper functioning of individual households and influences personal wellbeing
Hypothesis: Triggering a high-level construal mind-set would influence financial decisions and result in greater willingness to save than triggering a low-level construal mind-set
The effect of mind-set was not significant, F (1,71) = 1.028, p = 0.314 (Fig 2). These findings suggest that people in high-level construal and low-level construal do not differ in their financial decisions regarding consumption of necessities and short-term savings, but make different decisions in the domains of long-term savings and luxury expenses
Summary
The ability to make savings is important for national economic systems, it is essential for the proper functioning of individual households and influences personal wellbeing. In general, people’s attitudes toward saving are rather positive, their shortterm behaviour is often in conflict with their intention to save for the future. Insufficient savings tops the list of adults’ financial worries, as only a fraction of households have enough ‘rainy day’ savings. In 2013, only 53% of American families declared that. The effects of shifts in levels of construal on saving decisions
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