Whenever surveys ask people whether they’re saving too much, too little, or not enough, the overwhelming majority claim to be saving too little. But you always get a few people who claim they’re saving too much. I’ve lately been wondering who those people are and how they manage to save too much. Do they not know what to spend their money on? Are they constrained by a controlling spouse? Did they read the question wrong?

If we allow people to make random mistakes, we would expect the proportion of people saving too much and too little to be similar. If anything, there should be more people saving too much if credit card companies realize people may borrow too much. Maybe there are people who are saving too much but don’t realize it.

An easy answer is that certain things like spending money are tempting and people’s long-run self conflicts with their short-run self, resulting in under-saving. But lately I’ve been wondering how social norms and expectations contribute to how much we think we should be saving. An interesting aspect of this is that social norms can make you save too little (because buying a house, a car, and an expensive vacation is something every American should be doing) AND make you think you should be saving more (because it’s good to prepare for the future).

Since it is January, a related question is why are New Year’s resolutions so one-sided?  Think about how the following sounds to you:

This year, I resolve to spend more money, eat more junk food, exercise less, gain weight, travel less, spend less time with loved ones and more time on facebook and on drugs…