Wharton’s Katy Milkman has led a megastudy on 2 million U.S. bank customers, showing that regular reminders to save encouraged people to put money aside.
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Wish you could save more money? A new study led by Katy Milkman, a Wharton professor of operations, information and decisions and the co-director of Penn’s Behavior Change for Good Initiative (BCFG) finds that simple reminder emails give people a small push to transfer money into savings.
This is one the hardest financial habits for many people to maintain. About one in four adults in the U.S. has no savings at all, and four in 10 have less than a month’s earnings stashed away. This leaves millions of Americans exposed to unplanned costs like medical bills that can force them to sell possessions or take on debt to fund.
To find out whether behaviorally informed email reminders could help spur savings, Milkman—along with over a dozen co-authors, including her Wharton faculty colleagues Angela Duckworth and Christophe Van den Bulte as well as staffers Sean F. Ellis, Dena Gromet, and Ella DeMay of BCFG—ran one of the largest-ever studies on how to encourage people to add to their savings accounts.
“One of the biggest barriers to behavior change is simply that these tasks are not top of mind. We forget to move money from checking to savings, or we put it off until tomorrow,” Milkman says. “But when these are important decisions, forgetting can have real consequences.”
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