Planning Under Paucity: Responses to Resource Scarcity Threats Depend on Childhood Environments

Financial planning is pervasive in consumers’ lives. Not only does it impact how we spend money in our everyday lives, but it also has a profound effect on wealth accumulation and retirement satisfaction (Ameriks, Caplan, and Leahy 2003; Elder and Rudolph 1999). Because a principal reason to plan is to have a better and more comfortable future, might uncertainties about the future change people’s planning psychologies? For example, can cues indicating looming resource scarcity such as those related to economic recessions lead people to change their financial planning? Would such cues lead them to plan more or plan less? Recent work suggests that the answer depends. Research indicates that people respond in divergent ways when faced with threats of resource scarcity based on their childhood resource conditions (Griskevicius et al., 2013, White et al., 2013). For example, adults raised in relatively resource-rich environments took fewer risks and became less impulsive under cues of resource scarcity, whereas those from relatively resource-deprived backgrounds responded to the same cues by taking more risks and becoming more impulsive (Griskevicius et al., 2013). In the present work, we draw on the cost benefit framework of life history theory to investigate the effects of resource scarcity on people’s financial planning behavior.