Ah, the good old American Dream–the idea that with hard work and gumption, you can rise above your station and become rich (or at least richer than your parents). While some people still have faith in the idea of upward mobility, others are more cynical about its possibilities–often for good reason.
According to recent research out of Johns Hopkins, your belief in the American Dream and the possibility of “making it” can have a demonstrable effect on how you handle your finances.
Christian Kim, of the Carey Business School, looked at research subjects’ belief in upward mobility, and compared it with their tendency to spend impulsively. He found that people who had faith in the future were more likely to resist making an impulse buy; the reverse held true for those who believed upward mobility wasn’t possible. In other words: If you believe the future is a bright one, you’re more motivated to save up. But if you don’t think anything good is coming your way, you’re more likely to go for instant gratification in the present.
“Essentially, individuals who believed there was not much hope for upward mobility were more inclined to spend now than to save for later,” Kim said. We believe that this research could be used to develop policies or interventions that could help reduce impulse spending of individuals.”
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