A Glass Half Full of Money: Dispositional Optimism and Wealth Accumulation Across the Income Spectrum

In brief

Optimists save more. Across 143,000 people in several countries, with objective savings measures and within-person analyses, dispositional optimism predicted greater saving over time after accounting for income, education and other traits. The effect was largest for lower-income households, which suggests optimism is a resource that matters most where money is tightest.

Abstract

What drives some people to save more effectively for their future than others? This multistudy investigation (N = 143,461) explores how dispositional optimism-the generalized tendency to hold positive expectations about the future-shapes individuals' financial decisions and outcomes. Leveraging both cross-sectional and longitudinal designs across several countries, our findings reveal that optimism significantly predicts greater savings over time, even when controlling for various demographic, psychological, and financial covariates. Furthermore, we find that the role of optimism varies based on socioeconomic circumstances: Among lower income individuals, optimism is more strongly associated with saving. This suggests optimism may be particularly beneficial for the financial well-being of economically disadvantaged populations. To ensure the robustness of our conclusions, we employ diverse methodological approaches, including cross-sectional and longitudinal data sets, objective measures of saving behavior to reduce self-report bias, and within-person analyses to control for stable individual differences. These findings suggest that interventions and policies aimed at fostering optimism may be an effective approach to promoting savings and building financial resilience, especially among economically vulnerable populations. More broadly, our work underscores the value of integrating psychological factors into economic models of saving behavior to develop a more comprehensive understanding of how people make financial decisions in the real world.

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Published version (DOI) · More on money and wellbeing