Children's Saving: Effects of Prompting, Age, and Internal and External Factors

Abstract

Although saving plays an important role in our everyday lives, including the lives of children, we know little about how this capacity develops, including the factors affecting it and the most effective means to measure it. This study examines the impact of age, a verbal prompt to save, and how internal (children’s inhibitory control, impulsivity, attentional focus) and external factors (household income, parents’ level of education, parents’ saving practices with their child, and parents’ beliefs about the importance of saving) influence both children’s saving in a novel laboratory saving task and parent-reported saving. 187 children between 3 to 7 years of age participated in this study. In the laboratory saving task, which was based on the saving task by Metcalf and Atance (2011), children received tokens that they could exchange for a less desirable reward now, or save for a highly desirable reward three minutes later. Children were assigned to either the “prompt” or baseline condition. Children in the baseline condition only received basic instructions for completing the task, whereas children in the prompt condition received the additional reminder, before beginning the task, that they could save if they wanted to. Parent-reported saving was assessed with a questionnaire, asking parents about their child’s saving at home. The internal and external factors were also measured using questionnaires completed by parents. Results show that assigned condition was associated with whether or not children saved (“saving status”), and that higher inhibitory control and parents’ saving practices predicted increased parent-reported saving. These results show that internal and external factors impact children’s saving behaviour and provides a new paradigm for assessing saving in young children. Implications for future research and limitations are discussed.