Skip to main content

These four apps take advantage of behavioural economics to "nudge" people to save more for retirement

Apps are betting that a regular digital “nudge” can help you save a larger nest egg for retirement

In his 2015 book Misbehaving: The Making of Behavioral Economics, Nobel Prize-winning economist Richard Thaler cites a study showing how behavioural economics can "nudge" people to save more for retirement. In the study, employees in Group A were advised to save 5 per cent of their salary in a corporate retirement plan right away, while employees in Group B were given the option of saving less initially, and raising the amount they saved by three percentage points every time they got a raise. Group B, which deferred the pain of saving until later, saved less initially, but ended up saving more over the long run.

Now, a new category of apps and tools tries to capitalize on the nudge theory to help people save. Here are four options:


The app automatically compiles all of your financial accounts, tracks your spending and payments, and creates a budget. Opt-in email alerts then warn you if you're about to miss a payment or you've overspent your budget for a particular category, such as takeout coffee. The downside is that for it to work seamlessly, you have to enter your banking and credit card info, which may violate your terms of agreement–and fraud coverage–with your bank.


This app rounds up the price of every purchase to the nearest dollar and automatically directs the difference into a pre-set investment account. But as with Mint, you have to enter your personal banking details for the app to work.

Bank the Rest and Big Change

Not comfortable with handing over your banking info and password to a third party? Scotiabank offers its debit card clients the Bank the Rest option of rounding their purchases to the nearest $1 or $5–no app required–and having the change immediately moved into their savings or TFSA accounts. Customers of British Columbia's third-largest credit union, First West, can do the same using its BigChange debit card.


Koho is designed to help users save for a specific near-term goal, such as a new bike or a vacation. For each objective, you set the dollar value and the date by which you want to have the money, and the app tells you how much to set aside each day. Koho alleviates most privacy concerns by funnelling savings into a new prepaid Visa, with any purchases made using the card earning 0.5 per cent cash back.