The purpose of this study was to develop a system dynamics model to dynamically analyze the effects of heatwaves and apply it to real-world situations. For this purpose, first, the influencing factors of heatwaves were identified through previous studies. Second, a dynamic heatwave model was developed. Third, time series data from 2009 to 2018 were constructed, and the model was applied to Seoul. In this step, scenarios based on the budget were created, and the intensity of heatwaves resulting from changes in variables were measured. The results are as follows: First, the policy factors of heatwaves were classified into the cause and effect of the heatwave group, heatwave mitigation policy group, and heatwave adaptation group, forming a feedback structure. Second, it was observed that a 20% increase in budgets starting from 2040 led to temperature reductions of 1.57°C for the eco-friendly vehicle policy, 0.29°C for the high-efficiency air conditioners policy, 0.06°C for heatwave shelters, and 0.77°C for the creation of green space policy. Third, increasing the budget for heatwave shelters was found to be highly effective in reducing the number of people with heat-related illnesses.