About

The U.S. Household Finance Initiative leverages lessons and tools from behavioral economics to improve financial outcomes for families in the following areas:

Savings and Asset Building

Theory and microfinance practice suggest that habit formation and mental accounting are critical for saving and asset accumulation.  The U.S. Household Finance Initiative designs products and interventions that take these psychological factors into account to help convert consumers from borrowers into savers, leveraging tools from behavioral economics such as reminders, commitments and automated features that keep consumers focused on their goals.

Debt Management

Many public policies focus on encouraging people to save more than they would otherwise. Yet for many households, the wealth-maximizing strategy is to pay down debt, not accumulate assets. The U.S. Household Finance Initiative develops and tests tools informed by behavioral economics that will help households to not only pay down expensive debt in the short run, but convert from borrowers into savers in the long run.

Actionable Financial Advice

Limited attention plays an important role in consumer choice, especially on financial planning decisions and the ability to maintain a financial plan over time.  Creating a financial plan and sticking to it over time - whether it be with a goal of reducing debt, building savings, or maintaining a household budget - requires constant work and attention.  Here we explore simple and cost-effective planning tools and distribution channels for actionable financial advice that can create lasting impact on financial behaviors and help households achieve their financial goals.

Marketing

Framing, messaging and information disclosure can have important impacts on consumer decision-making.  The U.S. Household Finance Initiative works with partners to test and refine marketing content and messaging channels for both non-profit and for-profit institutions, applying lessons from psychology and economics to nudge consumers towards better financial choices.