People Who Are Great With Money Often Do This Fascinating Thing

This month, insurers publishing consumers survey reports have been taking a new approach: focusing on the characteristics of people who are doing things right.

Analysts at Principal Financial Group Inc. looked at 1,498 “super savers” — and they found evidence that super savers may spread super saving.

Principal came up with the sample by looking at participants in employer-sponsored retirement plans that use Principal as the recordkeeper. Principal surveyed plan participants born from 1965 through 1995 who have either reached the individual retirement account (IRA) maximum contribution limit or who have reached 90% of the retirement plan contribution maximum.

(Related: How People Who ‘Eat Their Insurance Broccoli’ Are Different: AIG)

Principal classified the super savers born from 1965 through 1977 as members of Generation X, and the super savers born from 1978 through 1995 as Millennials.

Principal analysts found that the super savers tend to be good retirement savers mainly because they feel as if they have the income to save, and they want to have a good lifestyle in retirement.

Few list “loss of faith in Social Security” or wanting to leave an inheritance as major reasons for saving.

Many say they accept high levels of work-related stress and long hours at work to generate the income they need to save.

Jerry Patterson, a senior vice president at Principal, said in a statement about the results that he believes the super savers are incredibly driven.

“These individuals have said, ‘My future is important, and I’m going to save to make it great,’’” Patterson said.

But typical super savers seem to focus more on generating more income, and on taking a moderate approach to frugality, than on depriving themselves of a decent standard of living today: Few say they do things like opting for secondhand goods or putting off starting a family for the sake of increasing their retirement savings.

Few say they splurge on luxury cars, but half say they splurge on travel, and 44% say they pay for subscription entertainment services.

One interesting thing the analysts found is that saving well might be a self-sustaining behavior.

Most of the super savers say they learned about personal finance from their parents, and 64% said they are teaching others how to become better savers.

About 56% say they are trying to pass on the ability to save to their children, and 54% said they are coaching friends.

When coaching children, for example:

• 77% of the survey participants have opened a savings account for the children.
• 52% have encouraged their children to get jobs.
• 49% have taught their children to budget.
• 49% have given children jars or piggy banks to encourage savings.

What This Means for Agents

The survey results may give financial professionals ideas about ways to reach super savers by supporting their coaching efforts.

Agents aiming at young families, for example, might be able to get the families’ attention by offering the families simple, co-branded budgeting apps aimed at grade school children.

Agents could also consider offer branded piggy banks, and working with local financial institutions to organize events aimed at helping children, and their families, open the children’s first saving accounts.

— Read 5 Top Thoughts From Principal’s Benefits Boss, on ThinkAdvisor.

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