Relationship between Saving and Spending Money

Relationship between Saving and Spending Money

Topic: Saving and Spending Money
2 Thing are needed:
1) You should read three articles from google scholar about the
topic and summarize it in word document and each one you
should include the references and in text citations. Each
summary should be minimum 300 Words.
& [In a separate document]
2) An Introduction: in which you will write the purpose of this
research + what have the 3 articles experts said about this topic
+ significant-why this research is important. Minimum 200
Words

In the end the 3 references.

Solution

Introduction

Money is among the most discussed topic, furthermore, authors have written
different articles about it. Some writers narrowed down to saving and spending which provides a
platform for one have an understanding about money. This study purposes to expound on saving
and spending money by viewing three articles which look at how to increase saving behavior,
spending tendencies and financial behaviors. People have different beliefs about money; some
believe it is evil while others believe that it is a source of power and prestige (Klontz et al, 2011).
Moreover, there is the need to develop a culture of saving in order to reduce financial problems
which crop after retirement (Hershfield et al., 2011). The provision of credit cards, especially in
developed countries, for example, Australia has an increased number of compulsive buyers who
spend more than they earn (Phau & Woo, 2011). There is the need for an individual to develop
better financial behavior in order to reduce money problems that bring trouble in the society
(Klontz et al., 2011). This paper is significant since it provides a framework that people can
follow to improve their poor financial behaviors, for example, excessive spending by adopting
responsible behavior like saving.

INTRODUCTION

Hershfield, H. E., Goldstein, D. G., Sharpe, W. F., Fox, J., Yeykelis, L., Carstensen, L. L.,
& Bailenson, J. N. (2011). Increasing saving behavior through age-progressed renderings of

the future self. Journal of Marketing Research, 48(SPL), S23-S37.
A study by Hershfield, Goldstein, Sharpe, Fox Yeykeis, Carstensen and Bailenson
expounds on saving and spending money by looking at an individual’s present goals and future
self. Money is part of our daily lives and there are aspects associated with it, for example,
earning and saving. Furthermore, it is imperative to understand that one has to earn in order to
save. Most people save for future, purposes, for example, life after retirements. However, to
ensure that the earnings create future stability after retirement an individual has to come up with
a savings plan. In order for one to understand components related to savings, they must possess
knowledge of their current and future selves (Hershfield et al., 2011). According to Hershfield et
al., (2011), people have an opportunity to earn from the age of 18 to 65 years, for example, in the
United States people retire at 65. Lack of saving after retirement is a problem in most countries
since people find it difficult to sustain their lives without the cash flow from their jobs
(Hershfield et al., 2011).
The same case replicates itself in the United States hence the need to formulate better
strategies that will ensure that more people have savings to sustain their lives after retirement.
Therefore, incorporating the trajectory of future self provides a platform for individuals to start
saving hence enabling them to overcome money challenges in future after retirement. Studies
show that there are remedies that can enhance saving, overcoming immediacy provide a platform
for an individual to think about the future. According to Hershfield et al (2011), imagining about
the future increases the chances of people avoiding present consumption and commit towards

SAVING AND SPENDING MONEY

consumption in the future. Furthermore, there is a possibility of enhancing saving by combining
the present and future beliefs to ensure that there is growth and progress towards a better future.
Phau, I., & Woo, C. (2008).Understanding compulsive buying tendencies among young
Australians: The roles of money attitude and credit card usage. Marketing Intelligence &

Planning, 26(5), 441-458.

Purchasing is one of the activities that result in spending money and breaking the
consistency in saving. An article written by Phau and Woo titled “Understanding Compulsive
Buying among Young Australians: The Roles of Money Attitude and Credit Card Usage”. The
study investigates the compulsive and non-compulsive buyers among young Australians to
expound on saving and spending money (Phau & Woo, 2008). The advancement in technology
enables people to access credit using credit cards hence increasing their purchasing power. The
easy access to credit cards, especially in the developed world has increased the number of buyers
on credit. There are two categories of buyers, the compulsive and non-compulsive, mostly; the
compulsive buyers have more than one credit card which allows them to spend more cash (Phau
& Woo, 2008). The compulsive buyers believe that when they spend it shows that they are
powerful since they have money (Phau & Woo, 2008). On the other hand, the non-compulsive
buyers may have credit cards but spend more due to anxiety and lack of trust hence increasing
their probability to save (Phau & Woo).
The high level of expenditure, especially among those with credit cards increases the
chances of an individual having financial problems in the future. Advertisement, online buying
options provides an easy way for people to spend their money without looking at future
consequences related to financial problems. According to Phau & Woo (2008), the society has its
own stipulations regarding money and some of the people in the community tend to deviate for

SAVING AND SPENDING MONEY

the social norms, especially when their need for safety and security are not met. Some tend to
focus on materialistic things that require them to spend money hence reducing their ability to
save (Phau & Woo, 2008)
Klontz, B., Britt, S. L., Mentzer, J., & Klontz, T. (2011). Money beliefs and financial
behaviors: Development of the Klontz Money Script Inventory. Journal of Financial

Therapy, 2(1),1.

Finances require monitoring since lack of vigilance can results in financial problems
which result in different problems in the society, for example, family problems (Klontz et al.,
2011). Furthermore, capital is associated with stress in life hence the need to have better
financial goals, for example, saving and spending wisely. A study by Klontz, Britt, Mentzer and
Ted expound on saving and spending money by looking at the beliefs associated with money and
financial behaviors. Looking at these factors makes it possible for the article to formulate money
inventory that can enable individuals to reduce financial problems, for example, through saving
(Klontz et al., 2011). People believe that money is a symbol of prestige, power, distrust,
retention-time and anxiety. Those who believe that money is a symbol of power and prestige
tend to spend it more, some to an extent of using credits to sustain a higher lifestyle (Klontz et
al., 2011). The beliefs about money tend to determine how an individual will spend their money,
some of the beliefs include money is evil, money equals power, money requires budgeting and
money show that one is successful (Klontz et al., 2011).
These beliefs depend on an individual’s income since it gives him the power to spend,
however, excessive spending due to poor beliefs can result in lack of savings. According to
Klontz et al., (2011), people who are old tend to worry more about money and males believe that
money is a sign of security. Different beliefs about money prompt people to varied financial

SAVING AND SPENDING MONEY

behavior, there is a high probability that anxious people spend less and save more to protect their
future (Klontz et al., 2011). The different categories of people, for example, money avoiders,
money worshipers have different notions about saving and spending money.

SAVING AND SPENDING MONEY

References

Hershfield, H. E., Goldstein, D. G., Sharpe, W. F., Fox, J., Yeykelis, L., Carstensen, L. L., &
Bailenson, J. N. (2011). Increasing saving behavior through age-progressed renderings of
the future self. Journal of Marketing Research, 48(SPL), S23-S37. Retrieved from
https://www.ncbi.nlm.nih.gov/pmc/articles/PMC3949005/
Klontz, B., Britt, S. L., Mentzer, J., & Klontz, T. (2011). Money beliefs and financial behaviors:
Development of the Klontz Money Script Inventory. Journal of Financial Therapy, 2(1),
1.Retrieved from newprairiepress.org/cgi/viewcontent.cgi?article=1009&context=jft
Phau, I., & Woo, C. (2008). Understanding compulsive buying tendencies among young
Australians: The roles of money attitude and credit card usage. Marketing Intelligence &
Planning, 26(5), 441-458. Retrieved from
https://espace.curtin.edu.au/bitstream/handle/20.500.11937/21865/118468_Understandin
g%20compulsive%20buying%20tendencies.pdf?sequence=2

References

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