Text Messages Can Make You Save More Money

Could a text message make you save more?

A new study says yes.

American researchers conducting a study overseas teamed up with banks to send text messages to consumers to remind them to save. There was a 16% increase in savings account balances by the cohort that got messages pointing out how the bank offered specific incentives for consistent deposits.

However, the messages that pointed out the bad things that could happen if you don’t save money did not affect the amount of money saved.

This could be a good strategy for US banks looking to shore up deposits (provided the service was opt-in, of course). Another idea is that you could program some self-help messages, personal finance or otherwise, into some kind of automated online text message service to help you reach your goals. I would probably use the calendar function on my phone because it pushes meeting reminders to the front of my phone.

What messages would you send yourself? What service would you use to do it?

Text Messages: Bad 4 Grmr, Good for Savings [WSJ via Consumer Reports Money Blog] (Photo: sfxeric)


Edit Your Comment

  1. FatLynn says:

    What kind of “incentives” are being offered? Interest?

  2. joshuadavis says:

    I’ve found the alerts Mint sends out to be highly helpful in reducing unneeded spending. So the results of this study don’t surprise me.

  3. savvy999 says:

    Or…. banks could raise savings (or short term CD) rates to the point where they actually beat inflation.

    Want people’s money? Make it attractive for potential and current clients to give it to you. Where’s the competition for attractive rates? Just looking at bankrate.com, seems like it’s a race to the bottom, not any sort of “market” to speak of in regards to good rates.

    A text message asking me to put my money into an account making 0.25% isn’t going to do crap. Move that decimal over, and I’ll on it. My money (and everyone else’s) flows quite easily in the direction of nice returns.

  4. CaptZ says:

    Text messages also save you tons of time. And as we all know, time = money.

  5. MercuryPDX says:

    “This Text Message just cost you ten cents.”

    • azntg says:

      @MercuryPDX: More like fifteen or twenty cents!

      (Which would offset whatever savings I’d get from saving in the first place – especially with today’s savings rates)

  6. floraposte says:

    Just to clarify, the researchers seem to be American, not overseas (two of them are named, and one’s at Darmouth and the other’s at Yale); it’s just that they conducted their research overseas.

  7. Colonel Jack O'Neill says:

    Ppl r s stpd f thy nd t gt txt rmndng thm t sv mny.

    Why nt d t yrslf, why th hll wld smn nd t b snt txt fr.

  8. props-nyc says:

    articles about text message reminders can also increase savings by 6%

    at least it did for me this month… this just made me go schedule a transfer

    • flugennock says:

      Can someone please explain to me how — at a cost to me of, what, ten cents per message — I’m supposed to save money being SMS-spammed by my bank?

  9. SPENCERG says:

    I would send myself a text message reminding me of the pitfalls I should stay away from during the week, and have it be sent “from Future SpencerG”.

    • XTC46 says:

      @SPENCERG: See, this is a great idea. Im going to build a website that can schedule texts messages to be sent at a specific time, so I can remind drunk xtc46 not to go to the beach at 3am next saturday

  10. whysthsncnsmrst says:

    Bank account texting is pretty nifty. I have a homemade Excel register and bump it up against my “transactions over $1.00” texts every morning. It is a lot more portable and I can also keep better track of the little charges that would be forgotten about.

  11. Blueskylaw says:

    “Could a text message make you save more?”

    Nope. After my Verizon phone started downloading songs on its own and Verizon wouldn’t credit my account I turned off the data option.

    It’s also been a huge timesaver because now I don’t get a text asking “hows work?”. If you feel it’s important to know “hows work?”, you have to give me a call.

  12. quirkyrachel says:

    Interesting. That sounds similar to a study that looked at helping people lose weight. They found that a simple email reminder or phone call during the week helped people stay on track with their food/exercise goals.

  13. FatLynn says:

    @floraposte: What do the messages say?

  14. savvy999 says:

    @secret_curse: har har

  15. Rachacha says:

    @nybiker: So for someone like me who does not have a TM plan, sending me text messages on how to save money will actually cost me money.

    When did AT&T purchase Bank of America?

  16. The Black Bird says:

    @pecan 3.14159265 ‘Your negativity on nearly every subject t…:

    I was going to say the same thing but you beat me to it.

    As to the text messages; while I don’t need any reminder to save money I do see it as something positive if it helps people.

    Many people need support and motivation in various ways. When I first started jogging many years ago I found out that if I had a partner to jog with it made it easier to get up early and do what had to be done.

    When I consider how many people have been helped by the various support groups available I look at the text messages as just another type of support.

  17. Damocles57 says:

    @FatLynn: “Like what? I am really curious about this, because I always have money on the brain and can’t imagine a text message changing my habits.”

    You are making the classic statistical mistake of thinking that a change of 16% in a group of people translates into you are 16% more likely to change.

    Additionally, it does not say that 16% of the cohort did anything, only that the savings rate increased by 16%. This could have happened if one or two people increased their savings rates by very large percentages during the study. We don’t know how large the cohorts were, what the initial savings rates were, how many people accounted for what percentage of change, etc.

    It may just be that people who are not you are motivated by these things.

  18. FatLynn says:

    @Damocles57: I know this. I am genuinely curious about what the messages say. But thanks for the superfluous stats lesson.

  19. floraposte says:

    @H3ion: It’s not subliminal if they’re consciously aware of it, though. Which these study participants are. These are just reminders that have a particular efficacy depending on how they’re pitched.

    As you say, subliminal advertising was outlawed–despite the fact that it doesn’t seem to work.