Here's how to train your brain to save more money
Photo: H. Armstrong Roberts/Getty Images Do you ever compare yourself to someone more savvy, self-disciplined, and generally on top of their money than you, even though you know it’ll make you feel like a wasteful idiot? Rest assured that the person you’re measuring yourself against is doing the exact same thing . Psychologists have a name for this universal human tendency: It’s called “upward social comparison,” also known as seeing how you stack up to those ahead of you in some way.
But what if we could? That’s what Raue wanted to explore in a recent study where she told participants how their savings measured up to their peers. The results were interesting: When participants learned that their savings lagged behind that of other people similar to them, they decided to save more.
Instead of striving harder, people who find out they’re saving less than others tend to bury their heads in the sand. In a 2015 study, a group of employees who had not signed up for a companywide savings plan were given a letter encouraging them to do so. That same letter explained how many other people at the company had signed up and urged the nonparticipants to follow suit. But the approach backfired.
The takeaway, then, is that upward social comparison works best when you’re looking at people who aren’t that different from you — ideally similar in age, income, and walks of life . “If you know that someone else is saving a little more than you — not a lot — then it can motivate you to moderate your behavior instead of discourage you,” says Raue. These people aren’t role models, exactly; they should feel accessible, not on a pedestal.
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