Do budgeting apps always improve consumers' financial decisions? Contrary to common beliefs, the use of budget apps can increase spending, especially at the end of the budget period. The authors of this article propose five interventions to mitigate the acceleration of spending and help FinTech apps better serve consumers' financial needs.
Budgeting in advance is a good practice to control spending. Research reported in this article, however, shows that budgeting too early for a specific purchase may increase spending. This is due to what the authors term 'budget depreciation', a process in which consumers adapt to the reference point set by the budget, lower their pain-of-payment from the budgeted amount, and increase their willingness-to-spend.
In many countries, most transactions are still made in cash. Yet, keeping cash in your wallet can be quite cumbersome. Notes are light and easy to carry, whereas coins are heavy and bulky. Does the inconvenience of carrying coins have an effect on how easily we spend them?
