Can a Simple Reminder Actually Help You Save More Money?

As the New Year gets started, you may be wondering how to save more money. It’s one of the most common New Year’s resolutions each year, after all.

Not a moment too soon, new research from the University of Pennsylvania’s Wharton School found a simple but effective behavioral nudge can help you do just that. Sometimes, all it takes to increase your savings account balance is a well-timed reminder.

“One of the biggest barriers to behavior change is simply that these tasks are not top of mind. We forget to move money from checking to savings, or we put it off until tomorrow,” Katy Milkman, lead author of the Wharton study, said in a news release. “But when these are important decisions, forgetting can have real consequences.”

In the U.S., about 40% of adults have less than one month of expenses saved, and 24% have no savings whatsoever, according to Wharton. As a potential strategy to help reverse the trend, the study looked at whether email reminders can help encourage people to put money into their savings accounts.

To determine this, the researchers analyzed the savings habits of nearly 2 million bank customers, making it one of the largest-ever studies on savings behavior. Participants were split into two groups. One group received no emails at all, and the other group received one of seven types of email campaigns for a period of two months.

The folks who did not receive an email reminder were less likely to put money into their savings account. Meanwhile, the participants who did receive an email reminder were overall 0.05 percentage points more likely to save — regardless of the type of reminder they received.

The researchers found, however, that the type of email reminder could really move the needle. The most fruitful type of reminder was one that was timed weekly, encouraging them to save if they hadn’t already or, if they did that week, congratulating them.

The group that received this type of email campaign was 1.3% more likely to make a savings deposit. While these numbers may seem small, given the state of Americans’ savings balances, simple (and free) interventions like this can make an outsized impact.

Wharton estimated that if every person had received this type of email reminder, they could have collectively saved an extra $6 million to $10 million, and it would have cost the bank almost nothing to implement.

Your reminder to save

The Wharton study shows that a simple reminder can go a long way with helping you reach your savings goals.

And while your bank probably won’t send you automatic savings reminders like the participants of the study, you can reference the study’s design to set your own reminders.

Workplace tools like Slack, Outlook and Google Calendar have reminder functions that allow you to tailor your message, timing and more. For calendar apps, you can create a task to transfer money into your savings. Then select the time, date and frequency to fine-tune it for extra effectiveness.

Similarly, on Slack, the “/remind me” function lets you schedule helpful nudges through the app that can — crucially — come as push notifications on your phone.

Milkman, with Wharton, says the study was designed through email because of its simplicity but that it’s also the “easiest to ignore,” adding that other methods could be better at getting your attention.

Artificial intelligence tools are increasingly rolling out features that allow you to schedule updates and reminders as well. For ChatGPT, the functionality is currently available only to paid users.

However, a similar tool called Perplexity allows you to set up scheduled tasks on the free version. With the task function, you can create recurring reminders with custom messages that come through email, SMS or the app.