Exploring the relationship of economic, sociological, and psychological factors to the savings behavior of low- to moderate-income households

Applying a multidisciplinary approach, this study examined economic, sociological, and psychological concepts to understand individual savings behavior with a national sample of low- to moderate-income families (N = 826). Multinomial logistic regression results showed that some of the economic, sociological, and psychological factors were statistically significant in explaining whether a person had only a savings account or both savings and investing accounts compared to having no savings or investment accounts. Economic factors had a more robust relationship with savings behavior when compared to sociological and psychological factors. Specifically, age and a financial behavior score were significantly related to the likelihood of having a savings account while income, net worth, and education were significantly related to the likelihood of having both savings and investment accounts. The number of information sources that a person used (a sociological factor) was significantly related to having both savings and investment accounts. The length of a person's planning horizon and the number of perceived barriers (psychological factors) were significantly related to having a savings account. Implications for researchers, policy makers, educators, and counselors are discussed.