Saving money certainly isn’t easy, as consumers contend with necessities like bills and grocery shopping and extras like new clothes or trips. However, a new study has revealed that the key to saving could come down to one important attribute: patience.
According to researchers from Duke University, the key to vigilant saving comes from inherent patience that what you’ll have later will be more beneficial than what you have now. Based on an experiment the researchers conducted, this can easily be determined through observing eye movements.
“We can see the savers’ decisions in their eye movements as their eyes jump back and forth between two dollar amounts,” said researcher Scott Huettel. “They don’t integrate information about time and money to determine how much a choice is worth, but instead use a simple rule that helps them make quick but good decisions.”
The eyes tell all
To see why some consumers are more inclined to save than others, the researchers performed an experiment that tracked participants’ eye movements when presented with two monetary options: getting $5 instantly or getting $10 in a month.
The study included over 200 young adults, and the researchers used cameras to track their eye movements when having to choose between the instant gratification and delayed gratification, which is ultimately the choice consumers have to make when saving.
“Figuring out how people make decisions is helpful for pinpointing where the decision process can go awry,” said researcher Dianna Amasino. “It could give people strategies they can use without having to increase time and effort.”
The eye trackers were able to break down what participants deemed the most important, which ended up being which outcome would leave them with the most money. The researchers found that patient people were not only more likely to save, but they also weren’t concerned with when they’d get the money, just that they’d get it at all.
“Patient people are not doing more analytic work,” Huettel said. “They actually make these decisions the fastest.”
The researchers hope these findings promote better savings habits for consumers, and they encourage more people to focus on the money -- not the time it might take to get the money.
“The way a decision is approached matters,” said Amasino. “Focusing on the long wait to accumulate savings can feel overwhelming. Focusing on the returns to savings and investments can be motivating.”
This study could prove to be very beneficial for consumers, as several reports from the last few years all have a similar theme: consumers are struggling to save.
Despite not putting money away regularly, a recent study found that not too many consumers are concerned about their savings accounts. Last year, 40 percent of adults reported not having enough in their savings in case of an emergency and would need to borrow from a friend or use a credit card to come up with $400.
“The finding that four in 10 adults couldn’t cover an unexpected $400 expense without selling something or borrowing money is troubling,” said Greg McBride, Bankrate.com’s chief financial analyst. “Nothing is more fundamental to achieving financial stability than having savings that can be drawn upon when the unexpected occurs.”
Experts suggest starting an emergency savings fund, and no amount is too small to put away each month.