Individuals with optimistic outlook save more

September 18, 2015

People with an optimistic view of the future often save more than those who have a less rosy view of the future. This conclusion is based on research by the TIAS School for Business and Society into the saving behavior of 1,438 Dutch people.

It is the first time that "attitude and conviction" have been linked to saving behavior. Self-confidence, tidiness, and optimism are key factors in future-oriented financial planning. Optimism is not the only decisive factor – saving is also popular among people who believe that their own actions produce results. And a slightly more obvious conclusion: People with a structured administration also tend to plan their own future more often.

Especially the baby boom generation saves often and a lot. More than the generations before and after them. The reason may lie in the economic circumstances in which people grow up. The conditions during the reconstruction years were tough, making thrift into the norm for baby boomers. Earlier research already showed that the early years determine our behavior later in life.

Having children makes planning an obvious necessity

The research shows that the tendency to save increases with age, income, and the number of children. This is fully in line with the available literature. Income generally increases with age and is a required condition for saving, and having children makes planning an obvious necessity.

"We are facing a future in which saving for the old age will become more important, while fewer and fewer of us grow up in a time when saving is the norm. The economic prosperity our society has enjoyed since the 1960s and the authorities that keep relieving us of more and more worries have weakened our aptitude for financial planning. High time we caught up," says Professor Dirk Brounen.

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Paper Taking Individual Responsibility, Brounen, Koedijk & Pownall (2015)

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