Savings with a Kick

Getting people to save is extremely important for their personal finances and the economic health of society as a whole. The savings rate in the U.S. is currently negative which means on average Americans spend more than they bring in and save. Harvard business school professor Peter Tufano used his research on creating innovative financial products to create a website (http://www.d2dfund.org/) that looks at ways to help low income folks save and invest more. One idea is "prize-linked savings." It would offer people the chance to win prizes for saving their money. No loss and a chance for a gain! This is Kahneman and Tversky's prospect theory in action!