I have my reservations with technology as it relates to money. I love how technology can help us better manage our money, but I’m also somewhat reluctant to turn too much of my financial management over to technology.
That’s because too much of a hands-off approach leads to poor money management and can get you in trouble financially. Technology can also be more of a crutch than a help, especially when it doesn’t work like you thought it would. In the end, you still have to know how to manage your finances manually without the help of a computer or software.
On the other hand, I can see how technology can be a great help in spending money wisely and saving money. Here are some cool technology advances associated with money.
Mobile Bank Apps and Security
Nowadays, every major U.S. financial institution has facial and voice security integrated into its banking app. I’ve always liked this idea since there are times I get nervous about the fact that my bank accounts can be accessed through my smartphone. I love the convenience, but I worry about what happens if my phone is lost or stolen.
There are steps you can take, such as installing an app that allows you to wipe your smartphone from a distance (I have this), as well as apps that allow you to locate your phone (I also have this).
Still, I like the idea of making your bank account inaccessible through biometric data. It’s another layer of protection you can use until you’re able to erase the data on your phone or recover it.
But back to the app itself, I love how you can deposit checks on the phone by taking a picture. That’s extremely convenient for me because I still receive checks from my clients. This means I won’t have to drive to the nearest bank just to deposit a check. It also means I can have the money deposited into my account and have the funds available to me sooner.
Payment Apps
I use Venmo extensively because it’s so easy to pay small amounts of money to family and friends. Paid for food first and need to split the cost? Click click click and payment is settled. Need to pay your friend back because he bought beer when he went to the store? Simple.
Advances in Digital Wallets
With the pandemic, handling cash is even more of a chore than before. That’s why I appreciate digital wallets even more. This is even better than credit cards because I won’t even have to bring a bunch of plastic cards out. No one is really traveling yet, but I remember how convenient it was to use my phone instead of searching in every pocket to look for where my boarding pass is in.
However, merchants are still slow in upgrading point-of-sale equipment to accept the technology involved. And, of course, you run into security issues with digital wallets. What if your phone is lost or stolen and you don’t have your wallet? Do you really want to keep your ID and other important items on a phone that’s so easy to lose?
Even with that complication, I still really like what digital wallets offer. Hopefully with such a major, trend-setting company as Apple leading the charge, merchants will continue to adopt digital wallet technology.
Better Saving Automation
I’m also seeing more automation in finances. I signed up for Digit.co, and was surprised at how much I like this method of keeping track of my bank balances — and how much I like the automatic savings.
My finances are already largely automated, including my tax account, emergency fund, retirement account contributions, student loan payments, and more. But Digit adds another layer. The company uses an algorithm that examines your habits and then automatically transfers money into a savings account based on your spending. It’s a natural outgrowth of robo-advisors and other automated financial services.
Investing Platform
Companies like Robinhood made investing more accessible. While I’m not sure it’s an amazing development to make investing too easy because it’ll just make everybody trade more often, making investing more beginner-friendly is overall a good development.
Technology also made investing more efficient in the backend. This may not seem like it directly benefits the customer, but the lower costs helped brokerage firms enough that they are making trading commissions free. It also indirectly led to trading platforms allowing anyone to buy fractional shares, which make high price stocks more accessible for the average joe.
Even with all this technology, though, I’m still reluctant to give everything over to artificial intelligence. I like to manually enter my spending into my personal finance software, and I still reconcile all of my accounts (credit cards, bank, investment, etc.) by hand each month.
Even with all of these new methods of putting things on automatic, I still enjoy having some sort of connection with my money.
How do you use technology to manage your money? Have you tried a digital wallet, or service like Digit, for convenience?
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The only technology app I appreciate is the one for my credit union. I’m not too hip on connecting my bank account with A lot of apps. Just my preference. Nice article.
It’s good to be cautious. Some of those apps are definitely convenient though, so it’s always a balancing act.
Interesting article. Various money management applications are often very useful. But if it comes to managing my funds in my bank account, I prefer to rely on simple and proven methods. Money management method that I use, is a method of Jars. I do not know if anyone has met with that before, but it is a very simple and effective method for managing capital. In short, it consists in dividing your money into different categories depending on their destination. Of course, instead of jars I have in my bank sub-accounts between which shall divide my money.
Great article! I think the current technological advancements available are great and very helpful, especially for busy people. For me, I like Digit, but like you, I also still like to reconcile my accounts by hand per month.
Personally I think those personal finance apps are a lifesaver! It was always a hassle to keep receipts and then write down what I spent each night – now I can tell them to skip the receipt and just put down in my phone what I just spent! Thanks for sharing all of these great tips.
I started using Digit when it first came out and can’t say enough good things about it. It makes saving money effortless.
I’m really interested to see how technology keeps changing the personal finance world in the future.