According to research published by the American Psychological Association, a positive outlook on the future may encourage people to save more money, with the most significant impact observed among those with lower incomes.
The study revealed that individuals with higher levels of “dispositional optimism”—the general tendency to anticipate positive outcomes—accumulated more significant savings over time than their more pessimistic counterparts.
“We often assume that optimism acts like a pair of rose-tinted glasses, potentially leading people to save less because they expect things to work out,” said lead author Joe Gladstone, PhD, of the University of Colorado Boulder. “However, our research suggests that optimism may actually be a crucial psychological resource that encourages saving, particularly for those facing economic difficulties.”
Gladstone and co-author Justin Pomerance, PhD, of the University of New Hampshire, examined data from eight large-scale population surveys conducted across the U.S., the U.K., and 14 European countries. Their analysis included over 140,000 participants. Each survey measured levels of optimism by asking respondents to indicate their agreement with statements such as: “I’m always optimistic about my future,” “Overall, I expect more good things to happen to me than bad,” and “In uncertain times, I usually expect the best.” Additionally, participants provided details on their income, savings, and, in some cases, total assets.
Three surveys were cross-sectional, meaning they captured data from respondents simultaneously. The other five were longitudinal, tracking participants’ responses over several years.
Across all surveys, a consistent pattern emerged: individuals with a more optimistic mindset reported having more savings. For instance, a one-standard-deviation increase in optimism was associated with an average increase of $1,352 in savings for households with a median savings balance of $8,000. This correlation persisted even after accounting for various demographic and psychological factors that could influence optimism and saving behaviour. These included age, gender, relationship status, parental status, childhood socioeconomic background, health, employment status, and the “Big Five” personality traits—conscientiousness, extraversion, agreeableness, neuroticism, and openness to experience.
“Even after controlling for these factors, optimism’s impact on saving was comparable to that of conscientiousness—a personality trait widely acknowledged for its positive influence on financial behaviour,” said Gladstone. “In fact, optimism appeared to have a slightly greater effect on savings than financial literacy and risk tolerance.”
The study also found that optimism’s influence on savings was most pronounced among lower-income individuals. According to Gladstone, this is likely because higher-income people often have structured ways to save, such as mortgage payments that build home equity or automatic contributions to retirement accounts. Additionally, those with higher earnings may have the financial flexibility to save without sacrificing.
“For someone living from one paycheque to the next, saving may seem like an impossible goal,” Gladstone explained. “However, an optimistic perspective may provide the motivation to set aside money despite financial hardships.”
These findings significantly impact financial education initiatives and policy efforts to increase saving rates, particularly among economically vulnerable groups. Integrating optimism-building strategies into financial literacy programmes could enhance effectiveness.
“Ultimately, fostering a hopeful mindset about the future, combined with the skills needed to manage money wisely, may be the key to helping more people achieve financial stability,” Gladstone concluded.
More information: Joe Gladstone et al, A glass half full of money: Dispositional optimism and wealth accumulation across the income spectrum, Journal of Personality and Social Psychology. DOI: 10.1037/pspp0000530
Journal information: Journal of Personality and Social Psychology Provided American Psychological Association