Losing Your Job Might Cause You to Save More

This week, Matt Egan in CNN Business wrote a piece called “Americans create new economic threat with their own savings.” In it, he wrote that credit card debt is declining as American’s are spending less AND are paying down their balances.

This information piled on top of a conversation we had on our other podcast, Behavioral Grooves, with Mariel Beasley, the Director of the Center for Advanced Hindsight at Duke University. She shared current research that lower-to-middle income Americans are saving MORE during the pandemic.

On one hand, that’s totally rational because we don’t know how long the crisis is going to last and we need to save for what will sure to be additional expenses. On the other hand, increasing your savings when you don’t have a job doesn’t make sense.

In this Weekly Grooves, we discuss some of the research literature on scarcity, fear, and the common mistake made by gamblers to place risky bets when their winnings are down. We also discuss the possibility of anticipated regret as a possible explanation for savings behaviors.

We hope you enjoy it and that you’ll share this episode with a friend.

© 2020 Weekly Grooves

 

 

AIRDATE: May 15, 2020 EPISODE 18

Losing Your Job Might Cause You to Save More