Behavioural interventions to improve financial wellbeing: a focus on budgeting

Given an increasing responsibility that individuals and households have in ensuring their own financial wellbeing, behavioural science is playing an increasingly important role. First, the science allows us to better understand how people make financial decisions, and second, choice architecture / nudging allows policymakers and consumer welfare agencies to better steer people towards choices that enhance financial wellbeing. In this chapter, we first provide an overview of financial wellbeing and the role of behavioural science, and present a brief overview of domains in which choice architecture interventions have been successfully used. We then focus on one specific intervention, budgeting, and show that there is considerable heterogeneity in how researchers and practitioners have used the term. We conclude with recommendations for both practitioners and academic researchers on how behaviour change interventions could further help improve financial wellbeing.