Module 2.5: Goal-oriented saving

Learn how goal-oriented saving can motivate you and reduce your tax burden, including Health Savings Accounts and 529 qualified tuition plans.

Competency: Jump$tart Coalition (2015), Spending and Saving: “Standard 1. Develop a plan for spending and saving” (p. 12).

Introduction to American Personal Financial Literacy, a Udemy course
Module 2.5 lecture recorded 2016-03-21

Visit the following webpage for more information on 529 tuition plans:


Garbinsky, Kleese, and Anker (2014) show that goal-oriented saving is enticing to individuals who feel powerless if the goal is a high-status item–a BMW luxury car, in their example. However, individuals who feel powerful do not even care about raising their outward status with profligate spending. We might infer that if saving for a purchase, they would want something that perpetuates their power—perhaps a college education or a reliable but inexpensive car. Garbsinky et al. assert that individuals who feel powerful are more enticed by saving for no particular purpose; they further assert that money itself confers power, quoting Andrew Jackson in their opening. However, in study 5, the authors successfully demonstrated that when knowledge is seen as more empowering than money, participants’ focus shifted accordingly.

Implications of Garbinsky et al. (2014): If you feel empowered, you will be more motivated to save for the future! Once you have enough money saved to feel secure, you may lose interest in accumulating more money. Then, you may want to turn to charity and philanthropy (Unit 8).


Garbinsky, E. N., Kleese, A., & Aaker, J. (2014). Money in the bank: Feeling powerful increases saving. Journal of Consumer Research, 41, 610–623.

By Richard Thripp