San Francisco, CA (PRWEB) October 07, 2014 -- Americans have always struggled to save money. Groundbreaking new research shows how a simple digital app can dramatically increase savings.
“Preliminary results indicate that the typical app user decreased their monthly spending by 15.7 percent,” said Yaron Levi of UCLA, the principal researcher on the study. “Almost all of this decrease came in the form of discretionary spending, with users spending far less on items such as dining out.”
“I believe the key is feedback,” said Bill Harris, CEO of Personal Capital. “If you want to lose weight, you need a scale. Every morning it measures your progress and reminds you to eat less and exercise more. Now, imagine if you could check your weight right before every meal. Our app is the financial equivalent of having a bathroom scale in your pocket. Every time you look, it measures your financial progress and reminds you to think twice about what you buy.”
UCLA Prof. Shlomo Benartzi, Levi’s collaborator, says that, “We had a hunch that the right information at the right time would be helpful to moderate spending, but we are still surprised how powerful these digital nudges are. Of course, we need more research to fully understand the drivers and magnitude of the behavioral changes.”
“Not only is this important for each family, but it’s vital for our country,” said Harris. “Since the 1960s, the U.S. savings rate has plummeted from 8% to 2%. And the aggregate deficit in necessary retirement savings has ballooned to more than $10 trillion. If we don’t solve this problem on a family-by-family basis, we as taxpayers will end up bearing the cost.”
Yaron Levi is a Ph.D. candidate in finance at UCLA and Shlomo Benartzi is a UCLA Professor and the author of Save More Tomorrow, a book focused on behavioral techniques to improving the 401k system.
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About Personal Capital: Personal Capital is a next generation of financial advisor. The company melds technology with professional advisors to help households with complex financial lives manage their wealth. Over half a million Americans now use Personal Capital to track over $100 billion in accounts and Personal Capital manages over $800 million in assets for investment clients. Personal Capital’s free apps are available for iPhone, iPad and Android.
Disclaimer: Personal Capital Advisors is a SEC registered investment advisor. Any reference to the advisory services refers to Personal Capital Advisors. SEC Registration does not imply a certain level of skill or training.
Catha Mullen, Personal Capital, +1 (914) 522-7206, [email protected]
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