Ohio State University did a study to see if there was a correlation between Maslow’s Hierarchy of Needs and people’s saving habits. Maslow’s Hierarchy of Needs? That’s an old established psychological tool that looks at human needs and ranks them from absolutely necessary (food and shelter) to more lofty objectives (fulfilling one’s potential, etc.) The vast majority of individuals have to cover the basics before moving on to more abstract requirements for a happy life. Most savings objectives follow that same pattern. Retirement, security, emergencies/safety and family needs are what inspire most people to save. Only a few reach that state of perceived well being that they will devote savings to those “lofty” goals. But, the researchers found, there is a higher likelihood that they will actually do the saving.
In fact, the researchers learned, the self-fulfillment goals may be more important to this particular segment of the population than the “necessity-based” objectives are to their compatriots. Desires for self-fulfillment are “incredibly powerful motivators for actual savings behavior,” they concluded.
By extrapolation, they suggest that thinking about one’s self-growth might be impetus for more effective savings. They say that those motivations can be built into an individual’s approach to saving for the future.
While the practical needs of a family are likely to take precedence in making decisions about savings, not all human needs are covered by that kind of thinking. There should be room in the analysis for such things as dreams of becoming an entrepreneur, taking classes in a favorite subject, traveling, donating to charities that are near and dear to one or any other objective that doesn’t fall into the “necessary” category.
Based on their analysis, the researchers suggested that someone with a desire to set aside money for self-fulfillment should start with an analysis of what they really want to save for. Then begin by putting spare change, if that’s the most you have available, in a designated jar. Or open a separate auto-debit savings account for any amount of money that is reasonable for your own budget. The amount is not as important as the commitment. Then avoid the temptation to dip into this special savings account. You’ll be joining an elite group that sees the fulfillment of life’s “wants” as being as important as providing for the “must-haves.”