A Mathematical Model for Enhancing Financial Planning through Behavioral Insights

الملخص

Abstract:

This study aims to bridge the gap between behavioral theory and financial practice by developing and testing a mathematical model rooted in the Theory of Financial Planning Behavior (TFPB) that quantifies how behavioral drivers—Financial Satisfaction (FS), Financial Socialization (FSo), and Cognitive Factors (CF)—influence financial Intention (I), Behavior (FPB), and Outcomes (FO). To achieve this, a linear mathematical framework was constructed to model the causal pathway from behavioral inputs to financial outcomes, and its dynamics were tested using a 20-period Python-based simulation with a controlled intervention of a 25% increase in FSo at period 10, supplemented by scenario analyses to compare the impact of strengthening different links within the model. The simulation showed that the intervention increased I, FPB, and FO by a sustained 10.2% each, with an elasticity of 0.41, while scenario analysis revealed that enhancing the translation of intention to behavior and behavior to outcomes yielded the most significant improvements in FO (28.6% and 25.0%, respectively), far outweighing the impact of boosting initial drivers. Based on these findings, the model demonstrates that the most effective interventions are those that facilitate the conversion of financial intentions into actions, providing a quantifiable framework for policymakers and suggesting that focusing on behavioral implementation—through tools, nudges, or coaching—offers the greatest potential for enhancing financial resilience.

Keywords: Household Finance, Intention-Behavior Gap, Financial Socialization, Computational Simulation, Financial Resilience