Study: When saving, it's best not to think long term

NORFOLK

The best way to save money is not to plan too far ahead, an Old Dominion University researcher said.

Leona Tam, an assistant professor of marketing, found that people saved more when they planned one month ahead than when they planned a year in advance.

The longer-term planners, she said Thursday, tend to have overly optimistic projections. When they see they're falling short, they're like dieters who think they're so far behind they might as well indulge in dessert.

Planning a month ahead, "you have more control over it," said Tam, who researches consumer habits and brand loyalty. "You can actually formulate how to do it in more concrete ways."

Tam's research, in collaboration with Rice University professor Paul Dholakia, involved nearly 700 people. Tam presented the results last week at the American Psychological Association convention in Boston.

Tam doesn't want to get on the bad side of financial advisers. Of course it's wise to have general long-range goals, she said. But "when it comes to actual saving, don't think ahead too much."

Philip Walzer, (757) 222-3864, phil.walzer@pilotonline.com