Science-Backed Tips

Boost Your Savings, Boost Your Mood

Automatic savings increase account balances by 27% and improve mood.


📊 Did you know?

Automatic savings deposits can boost account balances by 27%, enhancing mood through better financial control.
Benefits

💡 Why It Matters

1️⃣

Increased savings can lead to improved financial security, reducing stress levels.

2️⃣

Greater financial control is associated with enhanced overall wellbeing and mood.

3️⃣

Commitment savings products can serve as effective tools for promoting financial literacy and responsibility.

Give it a try

✅ Try These Micro-Tips

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Set up automatic savings deposits to increase your savings by 27%.

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Review your savings plan monthly to ensure you are on track.

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Consider using budgeting apps to monitor your financial goals weekly.

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Engage in financial education workshops at least once a year.

📚 The study

In a groundbreaking study conducted in the Philippines, researchers tested the effectiveness of commitment savings products through a randomized controlled trial involving 1,777 clients. The results were striking: automatic savings deposits led to a remarkable 27% increase in account balances.
This significant boost in savings not only enhances financial security but also plays a crucial role in reducing stress levels.
When individuals have greater control over their finances, they experience an uplift in mood and overall wellbeing.
The findings underscore the importance of commitment savings products as powerful tools for promoting financial literacy and responsibility.
By encouraging individuals to save automatically, these products can help them achieve their financial goals while simultaneously improving their mental health.
As we navigate an increasingly complex financial landscape, understanding the benefits of such savings mechanisms becomes essential.
This study serves as a reminder that small changes in our saving habits can lead to significant improvements in our lives, both financially and emotionally.

Source: Ashraf, N., Karlan, D., & Yin, W. (2006). Tying Odysseus to the mast: Evidence from a commitment savings product in the Philippines. The Quarterly Journal of Economics, 121(2), 635-672. Study Link
Evidence-based

📚 Related Research

Lusardi, A., & Mitchell, O. S. (2014). The economic importance of financial literacy: Theory and evidence. Journal of Economic Literature, 52(1), 5-44.

Set up automatic savings transfers to reduce financial stress and enhance your mood.

Study Link

Gale, W. G., & Levine, R. (2010). Financial literacy: What works? How could it be more effective? Financial Security Project at Brookings.

Enroll in an automatic savings program to enhance your financial security and reduce stress.

Study Link

Duflo, E., & Saez, E. (2003). The role of information and social interactions in retirement plan decisions: Evidence from a randomized experiment. The Quarterly Journal of Economics, 118(3), 815-842.

Set up automatic direct deposits into your savings account to increase your savings effortlessly.

Study Link

❓ Frequently Asked Questions ❓

Learn more

How do automatic savings deposits work?

Automatic savings deposits are pre-scheduled transfers from your checking account to your savings account. This process helps you save consistently without having to think about it each month.

What impact do automatic savings deposits have on account balances?

Automatic savings deposits can increase account balances by an average of 27%. This increase not only boosts savings but also enhances financial security.

How do increased savings affect mental well-being?

Increased savings can lead to improved financial security, which reduces stress levels. This financial control is associated with enhanced overall well-being and mood.

What are commitment savings products?

Commitment savings products are financial tools designed to encourage saving by requiring a commitment to deposit funds regularly. They can help promote financial literacy and responsibility.

How often should I review my savings plan?

It is recommended to review your savings plan monthly to ensure you are on track with your financial goals. Regular reviews help you adjust your strategy as needed.

Can budgeting apps help with savings?

Yes, budgeting apps can be effective tools for monitoring your financial goals weekly. They provide insights and reminders that can help you stay committed to your savings plan.

Why is financial education important?

Financial education is crucial as it equips individuals with the knowledge to make informed financial decisions. Engaging in workshops at least once a year can significantly enhance your financial literacy.

What are the benefits of having financial control?

Having financial control reduces stress and improves mood by providing a sense of security. It empowers individuals to make better financial decisions and plan for the future.

How can I set up automatic savings deposits?

You can set up automatic savings deposits through your bank’s online banking platform or by visiting a branch. Simply specify the amount and frequency of the transfers to your savings account.

What should I do if I struggle to save money?

If you’re struggling to save money, consider starting with small, manageable amounts and gradually increasing them. Additionally, seeking advice from financial advisors or attending workshops can provide valuable strategies.

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