This lecture will cover the following topics:

• Household finance includes the normative and positive study of how households use financial markets to achieve their objectives and the decision making process of these individuals. Despite the importance of households to the financial system, for many years, the field of finance has focused almost exclusively on financial markets, corporations, and financial institutions and other intermediaries.

• Households’ objectives are often much broader and complex in scope: saving and consumption decisions, housing and mortgage choice, investment behavior, pension and retirement.

• Household finance studies both the supply side (retail financial institutions) and the demand side (households and individual investors) along with intermediaries such as financial advisors.

• How do demographic trends, government policy, innovation, and technology (FinTech) affect the decision making process and outcomes of households?

• Focus on the inputs and mechanisms households use and the challenges they face when making financial decisions: beliefs and expectations, personal experiences, biases, financial literacy and education, advice and delegation.