Overcoming Impulsiveness: Identifying Prime Targets for Interventions to Influence Financial Behavior

Previous empirical studies have linked materialism and impulsivity to problematic spending, while financial literacy and future self-continuity have been shown to predict saving behavior. However, no study has explored the combined influences and interactions of these factors on financial behavior. In the proposed study, we ask two questions. First, what are the direct and indirect effects of these individual psychological factors on overall financial behavior? Second, within this framework, which of these factors are both influential and malleable enough to create meaningful behavior change through simple interventions? Results from a structural equation model reveal that time horizon and construal level when thinking about the future may be ideal targets for psychological interventions aimed at helping highly impulsive individuals improve their financial behavior. Introduction Conditions affecting retirement planning for US households have shifted dramatically in the past few decades. Life expectancies are rising (Center for Disease Control, 2011), while employee retirement plans have shifted from defined benefit to defined contribution formats, which put more of the burden of saving on the worker (Munnell, Webb, and Golub-Sass, 2009). These two factors alone suggest a need for greater saving and retirement planning on the part of individuals, since they imply a longer time in retirement and a larger responsibility to fund that retirement on the part of the employee. Still, contrary to the demands of the changing financial landscape, savings