We interviewed Jonathan Zinman, an associate professor of economics at Dartmouth College.
You've found an upside to an often annoying obsession. Describe your research on cell-phone texting.
We worked with several banks in different countries to give some of their clients text-message reminders to make savings deposits. These customers had signed up for savings accounts tied to goalsm — a commitment to make deposits around certain times, for example. We wanted to see whether text-message reminders increased the likelihood that customers would make those deposits and ultimately reach their savings goal.
From just $107.88 $24.99 for Kiplinger Personal Finance
Become a smarter, better informed investor. Subscribe from just $107.88 $24.99, plus get up to 4 Special Issues
Sign up for Kiplinger’s Free Newsletters
Profit and prosper with the best of expert advice on investing, taxes, retirement, personal finance and more - straight to your e-mail.
Profit and prosper with the best of expert advice - straight to your e-mail.
What did you find?
The reminders were effective. Customers who got them ended up saving 6% more in their accounts, compared with a control group who weren't reminded. Also, these customers were 3% more likely to meet their savings goal. These effects aren't enormous, but what's exciting is that this wasn't an enormous effort. Prompting people to do what they'd set out to do is inexpensive.
Did the wording of the message make a difference?
One thing we found is that mentioning the goal is way more effective than omitting it. If someone is planning to save for Christmas expenses, then sending a message that mentions Christmas is very effective.
Will it work for long-term goals, such as retirement?
Everything we did involved a short- or medium-term goal, with a horizon of roughly one year. We haven't done anything on retirement yet, but we'd like to.
Were certain people more responsive than others?
Some people have what social scientists think of as self-control problems that can depress savings. They know they have to save more, but something always leads them to procrastinate. The reminders worked much better on those people. The good news is that our results suggest that what we often think of as a deep and complicated self-control issue may be a simpler problem of lack of attention. Researchers may have misdiagnosed the cause of undersaving.
How can folks benefit from your research?
This is why we have PDAs and smart phones, right? Set a reminder. Also, many banks send messages or e-mails to report a low balance.
-
JPMorgan's Drop Drags on the Dow: Stock Market TodaySmall-cap stocks outperformed Tuesday on expectations that the Fed will cut interest rates on Wednesday.
-
Why Playing It Safe in Retirement Is a Big RiskFear of losing money could actually cost you in retirement. Find out why being too conservative with your life savings can hurt you and how to stop that from happening.
-
Tax Refund Alert: House GOP Predicts 'Average' $1,000 Payouts in 2026Tax Refunds Here's how the IRS tax refund outlook for 2026 is changing and what steps you can take now to prepare.
-
When Tech is Too MuchOur Kiplinger Retirement Report editor, David Crook, sounds off on the everyday annoyances of technology.
-
I Let AI Read Privacy Policies for Me. Here's What I LearnedA reporter uses AI to review privacy policies, in an effort to better protect herself from fraud and scams.
-
Amazon Resale: Where Amazon Prime Returns Become Your Online BargainsFeature Amazon Resale products may have some imperfections, but that often leads to wildly discounted prices.
-
What Is AI? Artificial Intelligence 101Artificial intelligence has sparked huge excitement among investors and businesses, but what exactly does the term mean?
-
Roth IRA Contribution Limits for 2026Roth IRAs Roth IRAs allow you to save for retirement with after-tax dollars while you're working, and then withdraw those contributions and earnings tax-free when you retire. Here's a look at 2026 limits and income-based phaseouts.
-
Four Tips for Renting Out Your Home on Airbnbreal estate Here's what you should know before listing your home on Airbnb.
-
Five Ways to a Cheap Last-Minute VacationTravel It is possible to pull off a cheap last-minute vacation. Here are some tips to make it happen.
-
How Much Life Insurance Do You Need?insurance When assessing how much life insurance you need, take a systematic approach instead of relying on rules of thumb.
