KARLA MURTHY:Like many Americans, Barbara Nordin, a freelance editor and writer in Charlottesville, Virginia often procrastinates.

BARBARA NORDIN:I knew that professionally I needed a website. And I, had the domain name, I, you know, made lists of what I put on it for eons

KARLA MURTHY:But in 2012, she learned about an online program that would push her to get the project done or else she would lose $50 dollars. Its an example of behavioral economics at work, according to Dean Karlan, a Yale University economist.

DEAN KARLAN:Its about realizing that youre going to respond to incentives. If you dont like the way youre going to respond, you can change those incentives. You can change the price of things by being a bit self-aware and thinking ahead.

KARLA MURTHY:Understanding how people respond to incentives is central to behavioral economics, a field which looks at the psychology behind economic decisions. This new science is being used to help people nudge them on everything from making better healthcare decisions to maximizing energy efficiency.

But one of its biggest uses is in improving peoples financial choices. An area in which many Americans dont excel. The personal savings rate is less than half of what it was a generation ago. And an estimated 56 million Americans have virtually no retirement savings.

JOSH WRIGHT:Financial education has actually had not great results in terms of getting people to change behavior.

KARLA MURTHY:Josh Wright is the executive director of Ideas42, a nonprofit that works with companies, foundations, and governments to apply lessons from behavioral economics. He points to a study that showed how committing to save more, not even today, but in the future, dramatically increased retirement savings.

JOSH WRIGHT:One of the interesting things about peoples financial lives is, they usually know what they wanna do or they have an intention to save more or spend less get greater control over their finances. And a lot of it has to do with following through on those desires and intentions. And theres a lot that behavioral science can do along with technology to help us help people help themselves, really, to do what they wanna do.

KARLA MURTHY:And new businesses have taken some of these insights to heart. Washington D.C.-based HelloWallet provides financial computer software, including budgeting and retirement tools for employees of big companies across the country.

Original post:
Can betting against yourself online help you save money?