It is an important life skill to personally manage money well, yet so many people struggle, even when they objectively have some excess. In the area of personal finance, psychological: theories, tools, and techniques play a tremendous role in shaping the way people hold on, grow, or part with their hard-earned money. Arguably it is the institutions who better use this psychology than citizens, with some level of marketing persuasion and social influence applied. Increasingly both entities have to cope with bad actors using the psychology of deception in an attempt to defraud them of the money they hold.
This paper will highlight the basic psychology helping 'ordinary' people in their finances - be they seen as consumers, customers, savers, business owners, investors, and similar. Innovative projects by the author as an applied psychologist will show some strong cases of return of investment and loss mitigation, as well as fraud prevention and vulnerability awareness. A showcase is formed of the direct impact in applying 'proper psychology' rather than giving platitudes and directives under such broad guises as 'financial wellbeing'.
The underlying theme in all these applications is that Psychological Science is not merely a subset of Behavioural Science (or Behavioural Finance). Psychology adds a unique perspective by drawing upon established psychological knowledge of individual differences and group dynamics applied for wealth preservation and growth. A final prompt is made for psychologists to be more actively involved with financial institutions and government in helping all citizens better manage their money.