Researchers Report a Financial Upside to Being Emotionally Insecure

"Friends may substitute for money as a psychological resource."

Unsplash / Keenan Constance

Insecurity is generally not a good feeling. The self-help industry exists to help people get rid of self-consciousness, uncertainty, and anxiety, but success is only within reach if you manage to “get out of your own way” and “rewire your mind”. Research published Monday in the Journal of Personality and Social Psychology, however, shows that you can be insecure but also be successful in a different way — one that’s linked to dollar signs.

The study shows that when people are feeling insecure about themselves, they are more likely to try to increase their financial savings. Lead author and Tel-Aviv University consumer behavior researcher Yael Steinhart, Ph.D., explained that this effect likely occurs because “people who are insecure about their lives and the broader world save as a means of securing their future in anticipation of a possible emergency.”

The study, which evaluated 2,401 US and Israeli citizens and 1,200 people in the Netherlands, was part of an effort to learn more about what inspires people to save money in the first place. In recent years, economists have noted a worldwide downward trend in saving money. For example, in January 2018, the average annual rate of personal savings in the US was 3.2 percent, while in December 2012, it was 11 percent.

Insecure people save more money.

Unsplash / Sharon McCutcheon

To gain a deeper understanding of the factors that drive saving intentions, Steinhart and her team decided to evaluate the psychological factors that play a role. Other psychological work has found that when people feel insecure, they’ll spend more time and energy doing what they can to protect and maintain the positives in their life. And so, they looked into the role insecurity might play in saving money: Would the same hold true when it came to cash?

Each experiment was designed to examine how insecure the participants were, what challenged their positive perceptions of themselves, and whether they tended to save money.

In one of these experiments, participants were asked to say how good or bad they felt about themselves, then divulge how many friends they have and how many they see in a week. Then, they were told to imagine they had just received $500 and asked how much of that money they would deposit. Consistently, the people who reported they had more positive social connections were less likely to save money.

“Friends may substitute for money as a psychological resource and buffer individuals from anxiety about the future,” Steinhart explained.

You're less likely to spend this dollar if you don't know what the future holds.

Unsplash / NeONBRAND

Across all of the experiments, a trend emerged: People who experience more self-image threats have a greater intent to save money. The researchers interpret this as a ploy to reduce their worries about the future. Saving money, they say, is a way to buffer other anxieties that may arise.

“In the presence of a threat to their self-image — that is, to their favorable perceptions of themselves — individuals express enhanced intentions to save for the future,” the researchers write.

The motivation to protect oneself, they explain, means that people whose self-image is threatened typically extend “their negative thoughts and feelings about themselves to other aspects of themselves.” This phenomenon is referred to as overgeneralization. It doesn’t make for a healthy psyche, but it does likely make for a healthy bank account.

Feeling a bit of insecurity, the authors conclude, could be wielded as a financial tool. They encourage people to consider the possible failures that might pockmark their way to success before they make investments. Optimism may seem more fun, but it can also make you more unrealistic about the future.


This research examines when and why a threat to self-image influences saving intentions. Data from a set of seven studies, comprising a large-scale survey and 6 experiments, show that when individuals experience a self-image threat, they generate negative expectations about their future. Consequently, these individuals show a greater propensity to save money compared with nonthreatened individuals. We demonstrate that this effect diverges from the effects of environmental threats (e.g., resource scarcity) on saving, and find that it is more likely to occur among individuals with strong rather than weak beliefs in the instrumentality of money. Finally, we observe that the relationship between self-image threat and saving intentions is attenuated under the following conditions: (a) when individuals are induced to adopt positive future expectations; (b) when individuals perceive themselves as having abundant social connections, a perception that buffers their anxiety about the future; or (c) when individuals’ attention is directed, through self-affirmation, to important aspects of their lives that are irrelevant to the threat.

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