Through a series of five experiments, the authors showed that feeling powerful — defined as having control over valuable resources — is a pleasant state that individuals are motivated to maintain. And since money is the most coveted resource we have, they argue that individuals who feel powerful save money to secure their feelings of power. Indeed, they found that if power were guaranteed to be secure for life — or if power could be leveraged through another resource, such as knowledge — it did not help fill the piggy bank. The impulse to save was observed only when saving money was considered a means toward maintaining power.
Read that last sentence and it rolls up a little bit with some of the ideas around inequality right now.
The researchers highlight a key point — some of the most basic things dictating how much money you have and how much you can save are essentially unchangeable, such as education, upbringing, parents’ professions, etc. So while it may sound like psychology-meets-hooey in some ways, the idea of simply feeling a little more powerful and understanding that saving money can help bolster that feeling could be the key.
I’m early-to-mid-30s and I’d say a good percentage of my friends (myself included) don’t even really think about savings day-to-day with loans and other obligations (I also know many that do), so research here could be tangibly crucial in terms of how to think about getting younger people to save. At the very least, it’s a different context of the discussion as opposed to the millions of self-help articles out there.