Goal Setting and Saving in the FinTech Era

71 Pages Posted: 13 May 2020 Last revised: 10 Sep 2021

See all articles by Antonio Gargano

Antonio Gargano

University of Houston - C.T. Bauer College of Business

Alberto G. Rossi

Georgetown University

Date Written: April 9, 2020


We study the eff ectiveness of soft, self-designed commitment devices, i.e. saving goals, in increasing individuals' savings using data from a FinTech App. We establish that setting goals increases individuals' savings rate and show that the effe ct is causal using a diff erence-in-di fferences identi cation strategy that exploits the random assignment of users into a group of beta-testers who can set goals and a group of users who cannot. We also show that the increased savings within the App do not come at the expense of reduced savings outside the App and that goal-setting also helps the individuals the literature has identi fied as the ones with the lowest propensity to save. We explore the economic channels of our results by matching App user survey responses to their behavior and highlight the importance of a monitoring channel, consistent with models where agents experience disutility from falling short of their goal and goal setting reducing individuals' limited attention.

Keywords: Goal Setting, Financial Technology, Saving Behavior

JEL Classification: D14, G41, G51

Suggested Citation

Gargano, Antonio and Rossi, Alberto G., Goal Setting and Saving in the FinTech Era (April 9, 2020). Available at SSRN: https://ssrn.com/abstract=3579275 or http://dx.doi.org/10.2139/ssrn.3579275

Antonio Gargano (Contact Author)

University of Houston - C.T. Bauer College of Business ( email )

Houston, TX 77204-6021
United States

Alberto G. Rossi

Georgetown University ( email )

McDonough School of Business
Georgetown University
Washington, DC 20057
United States

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