For right or wrong, money will play a huge role in your life and many of your pursuits will depend on it. Despite this, the average person if financially illiterate – in a recent American study, for example, 50% of those surveyed failed a basic financial test. Helping to shore up this problem is financial technology, which is providing a myriad of ways in which people can take control of their money management.
The basics: budgeting
A well planned budget is absolutely key to managing your money effectively. According to research published in the Times of India, budget planning makes families richer and happier. Budgeting has already been made easier by banking apps, which allow consumers to see their incoming and outgoing cash quickly and with more ease than ever before. Taking the next logical step are budgeting apps, that use a read-only view of your bank account to provide insights into your spending and provide tips on how to improve your money management.
Automating your saving
Saving money should be one of the goals of any looking to get their money under control. Having savings allows you to keep an emergency fund, to make big purchases, and to give a little bit extra over for your retirement. Technology is helping this cause, just like it has with budgeting. Some budget apps now have automated savings systems that advise on the range and quality of products available, and how much you should be saving to meet targets you are able to define. For those on lower incomes, several apps now work on ‘trickle’ investing – they calculate from your outgoings what you can afford to spare, and work from there.
Appealing to ethical hearts
Consumers are becoming more ethical in their purchasing. This is especially noted in younger members of society. Forbes have recently reported on new technology that not only assists with with managing money, but also helps the user to invest money ethically. Investments are often one of the best ways to make money, but require a huge amount of patience given the multi-year length of any returns. This is a ‘double whammy’ for many young investors.
Money management is a key life skill, but the evidence suggests many people are lacking in that department. Technology, through gentle nudges towards good habits, are changing that. As technology advances, it will continue to prove influential on money habits.