ARTICLES
Behavioural insights.
Financial literacy.
Real-life relevance.
This is where research meets every day decision-making. Each article in this section is written to help students, educators, and the public explore the why behind money choices.
Grounded in behavioural economics and financial education, these short reads aim to spark understanding and improve financial well-being — one insight at a time.
Swipe Now, Cry Later?
Why Cashless Payments Feel Easy — and Why That’s a Problem
Have you ever bought something with a card and barely felt it? But when you pay in cash, it stings just a little? That’s not your imagination — it’s psychology.
When we go cashless — tapping cards or scanning QR codes — we decouple the pain of paying from the act of spending. It feels seamless, almost invisible. But that’s the trick. Research shows that less transparent payment methods are linked to higher spending, especially among young adults.
In a recent study of Indonesian college students, those who used credit or prepaid cards were more likely to overspend than those who used cash. It’s not just about discipline — it’s about design. The way we pay shapes how we behave.
But there’s good news: financial literacy helps. Youths with stronger money knowledge were better at managing their spending, even when using less transparent payment tools. As our wallets go digital, we need more than technology — we need tools that make spending visible, intentional, and informed again.
Quick Tip: Try tracking your daily expenses for one week — or switch to cash for a few days. That little “sting” might actually help your budget.
This article is based on findings from the study “Opaque Payments, Open Wallets: The Relationship Between Payment Transparency and Overspending,” published in Research in Economics, Vol. 79(3), September 2025.
DOI: 10.1016/j.rie.2025.101045.
When we go cashless — tapping cards or scanning QR codes — we decouple the pain of paying from the act of spending. It feels seamless, almost invisible. But that’s the trick. Research shows that less transparent payment methods are linked to higher spending, especially among young adults.
In a recent study of Indonesian college students, those who used credit or prepaid cards were more likely to overspend than those who used cash. It’s not just about discipline — it’s about design. The way we pay shapes how we behave.
But there’s good news: financial literacy helps. Youths with stronger money knowledge were better at managing their spending, even when using less transparent payment tools. As our wallets go digital, we need more than technology — we need tools that make spending visible, intentional, and informed again.
Quick Tip: Try tracking your daily expenses for one week — or switch to cash for a few days. That little “sting” might actually help your budget.
This article is based on findings from the study “Opaque Payments, Open Wallets: The Relationship Between Payment Transparency and Overspending,” published in Research in Economics, Vol. 79(3), September 2025.
DOI: 10.1016/j.rie.2025.101045.
Savings: The Slow Superpower
How Tiny Habits Build Massive Resilience
Most people want financial security, but the idea of saving often feels boring, slow, or even impossible. After all, how much difference can putting aside a small amount each month really make?
More than you might think. Research shows that consistent saving, even in small amounts, is one of the strongest predictors of financial resilience — the ability to handle unexpected expenses, medical costs, or economic shocks without falling into crisis. It’s not flashy, but it works.
Why? Because savings do two powerful things:
They provide a buffer against life’s surprises.
They create a sense of control and confidence, reducing financial stress.
Studies using household and international survey data reveal that people who regularly save through formal accounts, even modestly, are far better equipped to cope with emergencies. This effect is especially important in emerging economies, where access to credit is limited and economic shocks are frequent.
Building savings is less about having a high income and more about forming the habit. Starting small — setting aside even a little each month — builds momentum. Over time, these tiny choices add up to a financial safety net that protects against uncertainty.
Quick Tip: Automate your savings. Even setting aside 5% of your income each month can turn a slow habit into a lifelong superpower.
This article is based on findings from the study “Save Big, Stress Less: How Account Ownership Builds Financial Resilience,” co-authored with Tan Ming Kuang, published in Journal of Financial Economic Policy, 2025.
https://doi.org/10.1108/JFEP-08-2024-0233.
Scroll, Spend, Regret
How Social Media Influences Financial Behaviour
Have you ever opened social media “just for a few minutes,” only to close it an hour later with a new pair of shoes in your cart — or worse, already on the way? You are not alone. Social media isn’t just where we connect; it’s where we’re subtly nudged to spend.
Platforms are designed to keep attention locked in, and advertising algorithms make it easy to target our desires. Flash sales, influencer promotions, and one-click checkouts remove friction from buying. The result? Spending feels impulsive and effortless — and the regret often arrives later.
Research shows that constant exposure to curated lifestyles and targeted ads can increase spending, particularly among younger users who are highly active online. The combination of social pressure, fear of missing out (FOMO), and easy purchase options makes social media a powerful driver of impulse buying and financial strain.
Awareness is the first defence. Limiting exposure to shopping triggers and setting intentional spending rules can help users regain control. Building financial literacy and mindful habits can also reduce the emotional pull of online “deals” that aren’t really deals at all.
Quick Tip: Before clicking “Buy,” ask: Would I want this if I hadn’t seen it on my feed? This simple pause can save both money and regret.
This article is based on findings from the study “Opaque Payments, Open Wallets: The Relationship Between Payment Transparency and Overspending,” published in Research in Economics, Vol. 79(3), September 2025.
DOI: 10.1016/j.rie.2025.101045.
Platforms are designed to keep attention locked in, and advertising algorithms make it easy to target our desires. Flash sales, influencer promotions, and one-click checkouts remove friction from buying. The result? Spending feels impulsive and effortless — and the regret often arrives later.
Research shows that constant exposure to curated lifestyles and targeted ads can increase spending, particularly among younger users who are highly active online. The combination of social pressure, fear of missing out (FOMO), and easy purchase options makes social media a powerful driver of impulse buying and financial strain.
Awareness is the first defence. Limiting exposure to shopping triggers and setting intentional spending rules can help users regain control. Building financial literacy and mindful habits can also reduce the emotional pull of online “deals” that aren’t really deals at all.
Quick Tip: Before clicking “Buy,” ask: Would I want this if I hadn’t seen it on my feed? This simple pause can save both money and regret.
This article is based on findings from the study “Opaque Payments, Open Wallets: The Relationship Between Payment Transparency and Overspending,” published in Research in Economics, Vol. 79(3), September 2025.
DOI: 10.1016/j.rie.2025.101045.
Pocket Science
What Cognitive Ability Says About Your Investment Habits
Why do some people confidently invest in stocks and mutual funds, while others stick to cash savings or property — even when they could afford to diversify? It turns out the answer may not just be income or education, but something more subtle: cognitive ability.
Cognitive ability — the mental skills we use to process information, solve problems, and make decisions — plays a quiet but powerful role in financial behaviour. Research using household data from Indonesia shows that people with higher cognitive ability are more likely to own financial assets, such as stocks and mutual funds, compared to those with similar income and education but lower cognitive scores. In contrast, owning property or durable goods doesn’t seem to depend as much on these skills.
Why? Navigating financial markets requires evaluating risks, understanding complex information, and planning for the long term. Cognitive ability helps investors overcome hesitation, confusion, and biases — allowing them to make more confident, informed choices.
The good news? These skills aren’t fixed. Cognitive training and targeted financial education can help people develop the tools they need to make better investment decisions.
Quick Tip: Start with what you can understand. Even basic exposure to financial concepts, such as diversification and risk, can help build the confidence and skills to take the first step toward investing.
This article is based on findings from the paper “Individual’s Cognitive Ability and Investment Choices,” co-authored with Michael Lamla and Jose Manuel Liñares-Zegarra. The paper was presented at the 13th International Conference of the Financial Engineering and Banking Society (Paris, France, 2024) and is currently being developed for journal submission.
Too Smart to Save?
Why High-Income Earners Still Struggle with Financial Resilience
Earning more money should mean feeling more secure — but for many, it doesn’t. Some high-income earners live paycheck to paycheck, struggle with emergencies, or carry heavy debts despite impressive salaries. Why does this happen?
Research shows that income alone doesn’t guarantee financial resilience — the ability to handle unexpected expenses, medical bills, or economic shocks without major disruption. Factors like spending habits, overconfidence, lifestyle inflation, and lack of saving behaviour often undermine security, even for those with substantial earnings.
In emerging economies, this challenge is magnified. Limited access to effective financial planning tools, coupled with cultural and social pressures to “keep up,” can push people to spend nearly as fast as they earn. Without deliberate saving habits, high incomes can create an illusion of stability rather than the real thing.
True resilience comes not just from what is earned, but from how money is managed — building buffers, setting priorities, and resisting the urge to let spending rise with income.
Quick Tip: Treat each pay raise as a chance to save more, not just spend more. Automating savings before expenses can turn rising income into lasting security.
This article is based on findings from the study “Save Big, Stress Less: How Account Ownership Builds Financial Resilience,” co-authored with Tan Ming Kuang, published in Journal of Financial Economic Policy, 2025.
https://doi.org/10.1108/JFEP-08-2024-0233.
Are You Financially Literate — or Just Confident?
Why Self-Assessments Can Be Misleading
Many people describe themselves as “good with money.” But when asked simple questions about interest rates, inflation, or diversification, the results often tell a different story. Why does this gap exist?
Studies show that self-assessed financial literacy — how confident people feel about their financial knowledge — often doesn’t match actual financial literacy, measured by correct answers to basic and advanced questions. Overconfidence can lead to risky decisions, such as overborrowing, chasing speculative investments, or failing to prepare for emergencies. On the other hand, those who underestimate their skills may avoid investing altogether, missing opportunities to grow wealth.
This gap matters because confidence alone doesn’t protect against poor outcomes. In some cases, it even amplifies mistakes by encouraging people to take risks they don’t fully understand.
The solution lies in measuring and building real knowledge — understanding core concepts and practicing decision-making — rather than assuming confidence equals competence.
Quick Tip: Test yourself with three simple questions: How does interest compounding work? How does inflation affect purchasing power? Why is diversification important? If these are tricky, it may be time to strengthen your financial foundations.
This article is based on the paper “The More You Know, The More You Grow: Why Advanced Financial Literacy Matters for Investors,” which is currently in progress and being prepared for journal submission.
“Click Smart, Stay Safe”
How Digital Finance Can Boost — or Break — Financial Well-Being
The digital revolution has made money management easier than ever. With a smartphone, it’s now possible to open an account, invest, borrow, or pay bills in seconds. But does this digital convenience actually make people more financially secure?
Research across 39 countries shows a surprising pattern. Financial literacy — understanding concepts like interest, inflation, and risk — consistently improves both financial security and peace of mind. Countries where adults score higher on financial literacy tend to have citizens who can better handle financial shocks, feel more in control, and report higher financial satisfaction.
Digital financial literacy, however, is more complicated. While digital skills can help people access new services, the data reveal that, in many countries, those who are more digitally savvy are not necessarily more resilient. In fact, digital literacy sometimes correlates with lower financial stability. Why? Being confident online can also mean greater exposure to risky products — from unregulated lending apps to speculative investments — especially when consumer protections are weak.
The takeaway? Digital finance can empower households, but only if it’s paired with strong financial knowledge, careful product design, and safe regulatory systems.
Quick Tip: Before signing up for a digital loan or investment app, check two things: Is the provider regulated? And can you afford to lose the money? Digital speed can be helpful, but it shouldn’t replace careful thinking.
This article is based on the monograph Advancing Financial Well-Being in the Digital Era: The Role of Financial and Digital Literacy, which is currently in preparation for publication.
“Still Smarter Than Your Smartphone”
Why Financial Literacy Outweighs Digital Skills for True Resilience
In a world where almost everything can be done on a phone — from opening accounts to investing with a tap — it’s easy to assume that digital skills are the key to financial security. But the data tell a different story: understanding money still matters more than mastering apps.
Research across 39 countries shows that financial literacy — knowing how interest, inflation, risk, and diversification work — is a far stronger predictor of financial resilience than digital financial literacy alone. People who score higher on financial literacy are more likely to build savings, avoid costly debt, and feel confident managing financial shocks.
Digital skills, on their own, can be a double-edged sword. While they help people access financial tools, they can also expose users to risky products, impulsive spending, and scams — especially where consumer protections are weak. Digital know-how without core money knowledge is like driving a sports car without knowing the rules of the road.
The takeaway? In the digital era, financial literacy hasn’t become less important — it’s become more essential. Digital tools can make managing money easier, but only for those who already understand the basics of money management.
Quick Tip: Before learning a new finance app, make sure you can answer three questions: How does compound interest work? What happens when inflation rises? Why is diversification important? The tech won’t help if the fundamentals aren’t there.
This article is based on the monograph Advancing Financial Well-Being in the Digital Era: The Role of Financial and Digital Literacy, which is currently in preparation for publication.
