The ant and the grasshopper: Understanding personal saving orientation of consumers

A low savings rate is a persistent social issue with significant present and future ramifications. As an alternative to conceptualizing saving money as goal-directed behavior, the present research examines the chronic tendencies of people to save money in a consistent and sustained manner through a personal saving orientation (PSO). Drawing upon theorizing on action control and research on forming and maintaining habits, the PSO emphasizes consistent, sustainable saving activities and incorporating them into one's lifestyle. In a set of nine studies, the PSO scale is developed and its nomological, test-retest, discriminant, and predictive validities are established. The results also show that the PSO moderates the relationship between consumers' financial knowledge and their accumulated savings. Additionally, low-PSO consumers are responsive to an intervention to help them save money. The PSO offers an effective method for understanding differences between consumers in their financial decision making and behaviors, and it can be used as a guide to encourage consistent and sustained saving practices.