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Words matter: How nouns and verbs affect financial literacy

Retirement Director Ben Rizzuto explains how using nouns – as opposed to verbs – can help financial professionals influence positive financial behaviors in clients.

Ben Rizzuto, CFP®, CRPS®

Ben Rizzuto, CFP®, CRPS®

Wealth Strategist

Apr 28, 2023
4 minute read

Key takeaways:

  • Research shows that subtle linguistic cues – specifically, using a noun instead of a verb to describe a desired behavior – can motivate individuals to adopt that behavior.
  • Financial professionals and retirement plan sponsors can adopt this strategy to influence positive financial behaviors and habits in clients and plan participants.

As we close out financial literacy month, I wanted to share a strategy readers can use to become more financially confident, be a consistent learner, and possibly accomplish other goals – financial and otherwise.

The strategy is based on research I learned about on Daniel Pink’s “Pinkcast” series, and it may be one of the most foundational things we can do when it comes to improving our financial literacy. That research and the lessons it provides come down to two simple things: nouns and verbs.

We all spent time in school learning about nouns and verbs, their function within sentences, how they bring structure to literature, and how to use them in everyday conversation. But nouns and verbs also have an important role to play when it comes to our financial literacy.

The connection between nouns and verbs and financial literacy may not be obvious. But as I learned from this research, the use of a noun versus a verb can help us shape a more positive identity or reaffirm the type of identity we would like to have.

There are two studies that looked at how subtle linguistic cues can motivate individuals to adopt a desired behavior. In the first study, children were asked one of two questions:

  1. “Would you mind helping clean up the room?”
  2. “Would you be a good helper and clean up the room?”1

In the second piece of research, adults were asked if they would be “voting in the next election” or if they would be “a voter in the next election.”2

In both cases, the use of nouns – “helper” and “voter” – led to higher uptake by participants. Those children who are asked to be good helpers aligned that noun with a positive self-identity and were 15% more likely to help complete the task. (As a parent, I’d call that a win). Similarly, the adults who were asked about being voters in the next election were 33% more likely to vote compared to those who are asked if they would be voting.

Using nouns to influence positive financial behaviors

As we think about financial literacy, the lesson this research provides is that choosing words carefully can influence positive financial behaviors and habits. The key is to determine which words – specifically, which nouns – define the identities we want the individuals we’re working with to adopt for themselves.

For example, instead of asking retirement plan participants if they will be saving in the plan, ask them if they will be a saver. Likewise, financial professionals might ask their clients, “Are you a planner?” or “Are you an investor?” (as opposed to asking “Are you planning/investing?”).

This research could lead retirement plan sponsors to review how they talk about retirement plan benefits and the culture the company has built around retirement saving. For example, when an employee sits down with HR to go through the employers’ benefits packet, the HR professional might say: “We at Company X are savers. That’s why we think this information is so important.” That deliberate phrasing helps to highlight and affirm a positive identity that we want to make sure participants aspire to.

Likewise, if you’re a financial professional, this might lead you to change the way you talk about certain behaviors you’d like clients to adopt. For instance, if you’re trying to encourage spouses to work together more when making financial decisions, maybe it’s using the noun “collaborator” more often. After all, I think every spouse wants their significant other to view them as a collaborator.

These linguistic changes can also work to discourage certain behaviors or habits. Studies have shown that using nouns that refer to socially disapproved behavior (e.g., “cheater”) led people to become less likely to engage in those behaviors.3 So if you want to discourage something like spending or excessive risk-taking, it might help to phrase those behaviors as nouns when discussing with clients.

So, as you’re sitting down with clients, participants, or even thinking about your own financial goals, ask yourself what type of financially literate person do I want to be? Do I want to be a planner? Do I want to be a saver? Do I want to be a spender?

By using nouns to describe these actions and behaviors, we’re more likely to tie them to ourselves. And if those positive behaviors are part of our identity, we are much more likely not just to do them, but to be them.

1 “’Helping’” versus ‘being a helper’: Invoking the self to increase helping in young children.” Bryan, C. J., Master, A., & Walton, G. M. Child Development, 2014.
2 “Motivating voter turnout by invoking the self.” Bryan, C. J., Walton, G. M., Rogers, T., & Rogers, T. Proceedings of the National Academy of Sciences, 2011.
3 “’Helping’” versus ‘being a helper’: Invoking the self to increase helping in young children.” Bryan, C. J., Master, A., & Walton, G. M. Child Development, 2014.