Personal finance management is a lot of work, but knowing how much to save and being consistent is the secret. Admittedly, saving enough can be challenging for people without sufficient income. This is evident in a CNBC report stating that 51% of Americans have emergency savings that cannot support them even for three months. While this is a problem, it is worth noting that technology simplifies your financial life. So, if you want to attain your financial goals, these tips may help.
#1: Track your spending with budgeting apps
In an era where apps monitor almost every aspect of a person’s life, it is unsurprising that personal finances can be managed this way. Budgeting apps are designed to help you monitor your spending habits and be aware of your expenses while planning to cut back. Recognizing your frequent financial activity is the first step to realizing that you may have a problem with money management.
A CNBC survey revealed that many Americans do not know they overspend until they use budgeting apps for two months. Moreover, survey participants admitted an inability to categorize their expenses, an even bigger problem with monitoring spending. If this is you, budgeting apps like Mint, PocketGuard, and YNAB might be helpful to you. In addition, some apps provide real-time updates that help you plan for future expenses, so keep this in mind.
#2: Use digital wallets for contactless payments
America’s move toward becoming a cashless society is progressing, especially as consumers say 41% of their weekly purchases are done digitally. In other words, more people are resorting to digital wallets to make contactless payments. Another factor spurring it on is the country’s high smartphone penetration rate. These devices make it convenient to carry digital wallets like Google Pay and Apple Pay. Moreover, you don’t have to worry about losing physical money to a pickpocket. That is not to say digital wallets do not have any risks; they do, but there are advanced security features to make them better options.
For example, biometric authentication and tokenization are standard security features with digital wallets. Their primary function is to protect your payment information from hackers who can use your details to commit identity theft. Therefore, with FaceID or Touch ID, you are assured of enhanced digital security when making payments online. Thankfully, it has caught on with retailers, making it possible to simplify your financial life with technology.
#3: Automate your bill payments
For many, bills are recurrent monthly payments that increase stress, anxiety, and sometimes frustration. Before financial technology became widespread, many people had to pay monthly bills to the banks or other payment points. Today, with a few button taps or clicks on a smartphone or computer, there is no need to be at the physical premises of a payment point. With an online banking solution provided by many financial institutions, you can automate your monthly bill payments and not risk forgetting to do them yourself.
These automatic payment options have become lifesavers as they continue to reduce the high incidents of late payments and resulting penalties. However, you need to review them regularly to avoid the risk of continuing to pay for services you no longer use. Unfortunately, many Americans had to learn the hard way when they realized their automated payments exceeded at least two months of unused services. Although some people were reimbursed, the reversal process was long and inconvenient.
Again, having enough in your bank account is essential to make automated payments a smooth process. It is always advisable to inform the bank if you can no longer make automatic payments. That will help you avoid the associated penalties with non-payment of bills, so keep this in mind. If need be, contact your creditors to arrive at a suitable payment plan.
#4: Consolidate your accounts
Some people may argue with this idea because they firmly believe in the famous saying, ‘Do not put all your eggs in one basket.’ But sometimes, they do not apply to every situation, and your financial life is one such example. Many people who manage multiple bank accounts say it is challenging to keep track of different investments, credit cards, and so on. The solution, therefore, is to consolidate all accounts onto one platform to make monitoring and tracking easier.
The same principle applies here, just like you want to streamline your work activities to make tasks easier. When you combine your financial accounts, you automatically streamline processes that would have been cumbersome if that hadn’t been done. Transferring multiple credit balances to a single card can simplify your financial life and make you less stressed. Even better, consolidating often comes with a lower interest rate and charges, so use it while you can.
#5: Explore the benefits of a robo-advisor
There is no way to discuss a tech-inspired financial life without mentioning robo-advisors. This online application functions with the help of mathematical algorithms and rules, so feel free to consider this. Designed to provide automated financial services, the robo-advisor is exactly what ChatGPT is to writers and researchers. Since the launch of the first robo-advisor in 2008, there’s been many more released into the public domain. Moreover, many investors have found this service extremely useful because it provides helpful information on managing long-term funds.
If you are a first-time investor, try out Betterment or Wealthfront robo-advisors to learn how to diversify your portfolio. Although there is an attached fee to a robo-advisor service, it is nothing compared to paying a traditional advisor. However, before you sign onto one, it is always advisable to ensure that the robo-advisor service is duly registered. As you look for ways to simplify your financial life with technology, consider low portfolio management fees because of their convenience.
Admittedly, technology is a great tool to use, but it’s equally important to do your research before getting on board one that claims to simplify your financial life. Hopefully, these tips will help you achieve the desired outcome, so feel free to leverage them.