The Think Forward Initiative is a multi-year movement bringing together a range of experts and research to find out how and why we make financial choices. The lessons learned will be a springboard for action to help consumers. On the 15th of March, the Think Forward Initiative held its annual summit to present the progress made in bringing tangible solutions to people to help them better manage their finances.
COFACE Families Europe has been involved in the work strand entitled “social-norm nudge” which aims at helping people save money. The concept would take the shape of a mobile application which :
- Helps consumers either create or maintain a financial buffer in case of unforeseen expenditure (life accidents, essential repairs like a car breaking down)
- Enables consumers to create savings goals and show their progress in reaching their goals
- Displays several indicators to incentivize savings such as recommended savings levels by trusted organisations such as the Nibud in the Netherlands and the average savings behaviour or peers
- Suggests ways in which consumers could save more money by analyzing their financial behaviour.
Over-indebtedness has devastating consequences on families and nudging consumers towards healthy financial decision making is one of the ways in preventing over-indebtedness. This is by no means a silver bullet and many other factors need to be considered such as irresponsible/predatory lending or contradictory injunctions such as pushing consumers to act responsibly (such as via the app) on the one hand, and cultivating frivolous spending on the other (via advertising for instance). To be successful, the Think Forward Initiative will have to consider the broader context in which their solutions will be operating, and this is our aim.
COFACE Families Europe is involved in the development of practical solutions which encourage responsible financial decision making but also lobbying policy makers to pass legislation fostering responsible lending.
For more information, see the official website www.thinkforwardinitiative.com