Effective budget management

This research project explores the critical factors for success in achieving sustainable behavioural change among low-income families in managing their budgets.

Overview and methodology

While identifying basic human needs and establishing corresponding reference budgets for a decent income is crucial in the fight against poverty, in many cases this will be insufficient to guarantee a decent living standard for everyone. Individual support is also necessary. Merely providing low-income families with the financial means to live healthily and independently is often only a first step and individuals must also learn to adopt their financial behavior in order to be able to make the most of their income, and this behavioral shift needs to be sustainable over time in order to have an impact.

This research project aims to identify the crucial factors that enable low-income families to adopt lasting behavioural changes in the financial area to more effectively manage their budgets. Through a systematic review of the literature, we create a checklist of features that define a successful (financial) counselling strategy. We subsequently examine this list in comparison to current counselling practices and develop a protocol for social workers who are involved in  debt counselling. Through an experimental design, we then assess the degree to which the implementation of this protocol aids clients in reducing their debts more efficiently and effectively, and to what extent they are less likely to relapse and incur new debts.

Results

However, the outcomes of this experimental procedure did not prove to be significant. The vast majority of participants in both the experimental and control groups repaid their debts on time and incurred very few new debts. Nevertheless, we did witness a noteworthy advancement in terms of augmenting clients' autonomy and decreased need to rely on the help provided by social workers.