The Psychology of Passion Spending
In 2019, Northwestern Mutual commissioned a “Psychology of Passion Spending Study,” a survey of 2,301 participants in the U.S. aged 18 and older in the general population between March 18-22, 2019.
The study found that when it comes to saving for passions, Americans don’t want to take chances – they want to make conscious choices. They want to make the right decisions, day after day, because their passions are their American Dream.
- Americans say they’ll put about 31% more of their monthly paycheck into the financial goals they’re passionate about.
- Americans are over two times more likely to set up automated transfer (36%), set up dedicated savings accounts (44%), and talk to a financial advisor (26%) about their Passion Goals.
People save best when they are saving for their passions, and today, people feel most passionately about saving for meaningful experiences that they can share with others.
- 77% of Americans who are saving for Passion Goals plan to share the purchase with someone else.
Couples crave the same financial goals – they both want a life filled with meaningful experiences – but the key difference is the passion women express for achieving their goals.
- More women (48%) than men (42%) feel passionate about saving for their financial goal.
- More women (54%) than men (47%) feel the item/purchase would allow them to do something they feel passionate about and/or would allow them to express a part of themselves they feel passionate about (49% for women vs. 41% for men).
- More women said the item/purchase is very important to them (57%) compared to men (50%).
All people want to live a rich life full of experiences, but among younger generations and among people of color (POC), the passion for planning is deeper.
- 53% of POC said they were passionate about saving for the item/purchase (vs. 42% Caucasians).
- 56% of POC said the item/purchase would allow them to do something they feel passionate about (vs. 49% Caucasians).
- 52% of POC said the purchase would allow them to express a part of themselves they feel passionate about compared to 43% of Caucasians.
- 52% of Gen Z and 51% of Millennials said they were passionate about saving for the item/purchase (vs. 44% of Gen X and 37% of Boomers).
- Younger generations (61% of Gen Z and 59% of Millennials) are more likely to say the item/purchase is very important to them (vs. 53% of Gen X and 49% of Boomers)