4/30/2023 0 Comments Surprise software my checkbookWe then go on to examine some innovative retail bank accounts, which are leveraging new technology with behavioural economics – a particularly strong combination - to help us keep better track of our finances.īEHAVIOURAL ECONOMICS CAN HELP TO EXPLAIN SOME OF THE BARRIERS TO GOOD MONEY MANAGEMENT How behavioural economics can help to explain some of our inefficient money management behaviour beyond the explanation of financial illiteracy. In this article, (which is part one of a new series about personal financial management), we look at: Unarranged overdraft charges stood at 1.7 billion in 2011, and maintenance charges from arranged overdrafts were £448 million. ![]() Overdrafts cost the consumer dearly – the average cost of borrowing £100 for a month in an unauthorised overdraft was £37 whilst in an authorised overdraft, it could still cost as much as £30. Īs of February 2014, there was over £7 billion outstanding on overdrafts in high-street banks, and although this figure has fallen since 2010, it is still over 60% higher than it was in 1997. ![]() Īnd other UK studies reveal our proclivity for falling into the red:ġ0% of consumers are permanently overdrawn. In a 2013 UK survey:ĥ1% of people reported that they struggled to keep up with bill payments and credit card commitmentsģ7% did not make or maintain emergency savingsģ2% said they did not plan for the future. Today’s high-tech banking system offers a multitude of technological aids which make payments and access to money easier and quicker: we take for granted the availability of ATMs, chip and pin and contactless cards, credit cards, direct debit, online and mobile banking.īut despite so much technology at our fingertips, many of us struggle to keep track of our money. We’ve come a long way from weekly pay packets and cash under the mattress.
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