All You Need’s a Little Nudge

By Lizzie Letsou

As Gloria Estefan put it, sometimes all you need’s a little nudge.

But, what exactly is a nudge? And how can a “nudge” help you develop better money habits? Keep reading to learn about the science behind our best financial practices, and how you can use to support them.

The “nuts” and bolts of behavioral science 

In a 2018 article titled “Behavioral economics from nuts to ‘nudges’,” economist Richard H. Thaler describes a seemingly innocuous dilemma: overindulging in cashew nuts at a dinner party. Thaler’s solution to this problem was a simple, yet effective, one. He took the bowl of nuts and placed them in another room.

When he returned to his guests, they all seemed grateful for what he had done. This led him to ponder: “Why were my dinner guests happy when the cashews were removed?”

The answer may seem obvious. Even Thaler himself manages to encapsulate his guests’ logic in a single sentence: “We were worried that if the cashews were nearby, we would eat too many of them.” 

Avoiding (financial) overindulgence

Even though Thaler was able to resolve a (relatively small) problem with one simple (yet meaningful) action, resisting temptation and avoiding overindulgence is not always an easy thing to navigate. For example, I’m sure we could all agree that it’s not as easy as merely “removing the bowl of nuts” when it comes to avoiding financial overindulgence. 

Why is that?

According to Thaler, there exists in all of us a struggle between our “passions” and “impartial spectator.” We struggle to balance our “commitment” and our “guilt.” In other words, we aim to enjoy all of the great things life has to offer while still being rational and disciplined beings.

So, what is the solution to this? How can we, essentially, trick ourselves into making better, more logical choices without feeling like we’re missing out on something? Well, as it turns out, it may only take a little “nudge.”

Track your mindset and your money with, the financial wellness app.

Nudge your way to better money habits

The concept of a “nudge” originates from Thaler’s theory of “libertarian paternalism.” As Thaler points out in his article, one of these phrases is clearly more catchy than the other. Nonetheless, both terms essentially describe the same concept — being able to make better, smarter choices without limiting yourself. 

To dive a little deeper, Thaler defines “paternalism” as “choosing actions that are intended to make the affected parties better off as defined by themselves.” And “libertarian” is simply modifying “paternalism,” signifying that “no one is ever forced to do anything.” While this may seem super theoretical and detached, it’s actually not! 

Remember the cashews example from earlier? A libertarian paternalism “version” of that instance would go something like this: Thaler asks his guests the day before how many cashews they want to eat during the dinner party, proactively and presciently controlling the choices of his guests without limiting their enjoying of the food and/or the event. 

Put away the cashews — and the credit cards

But what does this all have to do with money? To make a long answer short — a lot. 

Let’s say you’re doing some online shopping. You go to check out and notice that you saved your credit card info the last time you shopped on this site. How convenient! Yet it’s also a risky move. Not only does it leave you vulnerable to hacks and other safety threats, but it can also put you at risk of overspending

Why is that the case? If we take a step back, we can easily see how Thaler’s cashews example is very similar to my “saved credit card” hypothetical. Having a big yummy bowl of cashews at your fingertips makes it hard to resist overeating. Similarly, having your credit card info reared up and ready to go each time you get the urge to do a little retail therapy might make you more likely to overspend. 

Thankfully, there’s a simple solution to this issue: simply don’t save your credit card information on any shopping sites. In this case, that’s the only “nudge” you need to take control of your finances. 

Become a “choice architect” 

Okay, but what about more complex financial problems? What about budgeting, savings, and retirement planning? Fret not! Thaler’s theory of “nudging” can help you with all those aspects of your financial health too. 

Thaler astutely notes that “people have more self-control regarding future plans than immediate behavior.” This basic presupposition underlies “nudging.”

With automated budgeting in your money app, budgeting has never been easier.’s categories allows you to nudge your spending

Put more plainly, it’ is easier to limit the number of cashews we eat if we decide on our portion size ahead of time. Similarly, we can easily avoid impulse spending by controlling the availability of our credit card info. Both of these scenarios are examples of our present self exerting control over our “future plans.”

Thus, if we apply this concept to loftier financial goals — such as savings and budgeting — we will find that nudging has much greater implications. Nudging allows people to become “choice architects,” as Thaler puts it. And, the mechanism under which nudging operates on a macro level is still relatively uncomplicated. 

Let’s consider another example: you have a hard time with budgeting and saving your money. You find budgeting daunting because it feels like you’re restricting yourself, and this leads to you never having enough extra money to put into a savings. account. How can you “nudge” yourself to a better financial state?’s nudges

This answer is so simple you might be shocked. Under Thaler’s view, all you have to do is place “labels on specific budget categories.” Understanding exactly what you are spending your money on is powerful. And it can also help you be more mindful going forward, perhaps limiting the amount you ultimately spend each month. 

Luckily, with’s “Budgets” feature, it’s never been easier to track and label your expenses. You can categorize your spending in order to remain cognizant of where your money is going on a daily basis. In addition, you can view your “available” and “budgeted” funds at the same time — this definitely helps you keep track of the bigger picture. Moreover, just underneath the “Budgets” section, you have the option to create an Auto-Save, which allows you to help your future self out a bit.

Diving Deeper in Psychology and Money

Nav.It’s Legacy Health Check

If you’re interested in taking a more in-depth look at your monthly spending, emergency funds, and high interest debts, check out’s “Financial Health Check.”

Though it may sound scary, the “Health Check” is simply a way for you to see if your money habits are in line with’s three basic financial health principles — spend less than you earn, have an emergency savings fund, and pay off high interest debt. As you start making smarter money moves, you’ll see that reflected in your “score” change, which is encouraging to say the least!

Still feeling unsure about how to navigate all this? has a super cool feature that allows you to chat with a coach.’s coaches can help you check up on your financial health, and they just might help you implement some of the “nudging” strategies I’ve discussed in this article!

Now that you’ve learned all about nudging and, you’re ready to take on the challenge of bettering your financial wellness! Whether you’re already killing it and making money moves or need a little boost on your path to success, I hope this article helped you out. I also hope you take full advantage of all of’s incredible financial resources and practical application of nudges. After all, is here to help you out every step of the way, no matter how far along you are.

Related Reads

Psychology of Gratitude and How It Benefits Your Pocketbook

Despite High Wages, Why Don’t We Feel Content?

What is a Growth Mindset?


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