Tipping Point: What does the term 'nudge' mean?

In behavioural economics, the term means that people can be incentivised to make better decisions by framing choices in a way that increases their probability of doing the right thing. It is being discussed currently because Richard Thaler, an American economist and the co-author of a book on the subject, has been declared the winner of this year’s Nobel Prize in Economics.  

Do nudges work in personal finance?  

Make the desirable choice your default option and the less desirable choice the opt-out option. Suppose you have a choice between opting for a systematic investment plan in an index fund versus investing in an exchange-traded fund. The former should be the default option as it will help you invest more regularly. In the latter case, you have to call your broker each month, and are more likely to miss out.