Teensâ€™ Self vs. Othersâ€™ Decisions on Saving vs. Spending Money
AbstractPeople make financial decisions for themselves on a daily basis and are often asked to make financial recommendations for others. Part of these decisions involve a time horizon where people must decide how much money to spend immediately and how much to save for the future. Since personal decisions tend to be private while recommendations made to others are necessarily public, â€œselfÂenhancementâ€ (Wallace, 2014) suggests that people would be more likely to take a longer term perspective when making recommendations to others than when deciding how to spend their own money since they would want to seem like they are advising others to act in a â€œresponsibleâ€ manner. This was tested with a population of 70 high school students. Half of the students were given a hypothetical scenario in which they were given a gift of $1000 and the other half were given a hypothetical scenario in which a friend was given a gift of $1000. In the first scenario, students were asked how much of the $1000 they would save and how much would they immediately spend, while in the second scenario, students were asked how much they would recommend that their friends save or spend. Results confirmed the hypothesis as students recommended, on average, that their friends save twice the amount that they themselves would save.
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